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Thread: The Big Squeeze:

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    Default Re: The Big Squeeze:

    This Is How Bad The Economy Really Is: “Walmart Customers Are Too Broke To Shop”

    By Mac Slavo SHTFplan.com March 9th, 2016


    © Nicholas Eckhart A Walmart store that's about to close.

    You may find that the below report is, as President Obama might suggest, once again “peddling fiction.”

    But for the average American, we can assure you that the economic recession is a very real situation.

    Walmart, which made its billions serving low to middle income Americans, is struggling and it’s because their core customer base is too broke to shop. As Michael Snyder recently pointed out, they are just one of many domestic retailers laying off workers amid falling store sales. But they are certainly the biggest and baddest of the retailers out there. If they are having problems it should be a big red warning sign that despite mainstream cheerleaders telling us not to panic because the economy is still in good shape, we are in for some rough times ahead – in fact, the rough times are a reality right here and now.
    Quote Walmart’s customers are too broke to shop
    Walmart is facing a “perfect storm” that’s hurting its sales growth, according to Moody’s.

    The company’s core customers are struggling with flat income levels, and savings from lower fuel prices aren’t translating into more retail spending, Moody’s vice president, Charles O’Shea, wrote in a note to clients on Wednesday.

    The business is also under pressure from deflation in key product categories, such as food, and the effects of the strong dollar abroad.

    “Walmart is facing an almost perfect storm when it comes to top-line growth,” O’Shea wrote. “Until the health of the lower-to-middle-income consumer improves, Walmart will continue to face macroeconomic headwinds in the US.”

    Walmart said last month that it’s expecting virtually no sales growth in the coming fiscal year.
    Source: Business Insider via Yahoo
    The entirety of the growth story being disseminated to the American public is being revealed, almost daily, for the sham it really is.

    Stock markets may have recently rocketed back up with many an analyst suggesting they are back on track to go to new highs. But when you consider that one of the lowest price retailers in the country can’t increase or even maintain their sales, then it suggests that something has to give.

    As Brandon Smith warned this week, we are experiencing the most unstable economic conditions possible and coming central bank action (or inaction) may well lead to another leg down in global stock markets.


    Regardless of what stock markets do going forward, to the average person trying to put food and clothing in their Walmart grocery basket it doesn’t really matter whether the indexes are lighting up red or green.

    For them, the collapse isn’t some future event.

    It is right now.
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    Default Re: The Big Squeeze:

    “Made In America”: How These 7 Popular Companies Are Exploiting Prisoners And Ruining The Economy

    By Brianna Acuesta Posted on March 11, 2016

    American corporations are making a killing off of exploiting inmates instead of giving jobs to unemployed Americans.


    Credit: Buycott

    The prison-industrial complex: some may have heard of it, but this term is still widely unknown amongst the masses despite it’s huge effect on the American economy. This complex is described as “the overlapping interests of government and industry that use surveillance, policing, and imprisonment as solutions to economic, social and political problems.” The interests of the government are their efforts to increase their policing of people rather than solving the root of the problems, which leads to over-incarceration. The interests of industries are their financial holds over privately-owned prisons and their exploitation of prison workers who are underpaid and overworked.

    How does this affect America? First of all, outsourcing, which is frowned upon by those who know about it because of its economic effect on American citizens, is replaced with “insourcing,” which is when corporations employ prisoners for as little as $0.23 per hour. Outsourcing affects the American economy by choosing to employ workers in foreign countries rather than displaced workers in America itself, thus causing a rise in unemployment and poverty.

    Insourcing is just as bad for the economy for several reasons. The extremely low pay for prisoners might be fine if the prices they have to pay for communication and commissary items weren’t so vastly inflated compared to their wages. Instead of being released from prison with job experience and a small bit of money in their pocket to get back on their feet, inmates are often released with a debt to the prison that they can’t pay off because of the low wages. Some might argue that these inmates are criminals, so they should take what they get and not complain, but consider what this means for America as a whole. Since these criminals are in debt upon release, they re-enter society as unstable individuals looking for any way to earn money again, often causing them to relapse into old habits or crimes and landing them back in prison. The American taxpayers are the ones that wind up paying for the prisoners’ continued stays in correctional facilities, which could have been avoided if the inmates didn’t have the debt and had better job training or program opportunities.

    Meanwhile, the companies that employ prisoners often get huge tax breaks, which is millions of dollars that the American people could have benefited from. On top of all of that, citizens of America that aren’t incarcerated don’t have those job opportunities that are given to inmates. Less Americans with jobs means that the economy remains stagnant because less citizens are spending money. So yes, it has a significant impact on all Americans.


    Credit: Popular Resistance

    While most huge companies in America employ prisoners, here is a list of household names that really make a killing off of the prison-industrial complex:
    1. Whole Foods: Often called “Whole Paycheck” because of its pricey items, this company came under fire when it was revealed that they were selling artisan cheeses prepared by prisoners who were only paid $0.60/day. Critics pointed out that these kinds of wages are not fair trade.
    2. BP: A perfect example of how insourcing affects displaced workers, BP had a massive oil spill on the Gulf Coast and exclusively hired inmates to come do the clean up. Though there were plenty of fisherman that were displaced because of the oil spill and in need of work, BP did not extend the opportunity of employment to them and offered no remedy for the issue.
    3. McDonald’s: This fast-food franchise employs inmates to make a number of items for them, from plastic cutlery to uniforms. The inmates who make the uniforms earn significantly less than those who wear the uniforms, which is already called a “starvation wage” rather than a minimum wage because it is impossible to live with the small hourly pay.
    4. AT&T: Over 20 years ago, this well-known and widely-used tech company laid off thousands of union telephone operators and replaced them with prisoners in their call centers in order to increase their profits. AT&T has employed them in this same fashion ever since 1993 while paying them only $2 per day.
    5. Wal-Mart: This huge company might claim to never exploit prisoners, but just like everything else Wal-Mart does, their method of increasing a profit is shady at best. Nearly everything on their shelves is supplied by prison laborers through third-party companies that place prisoners in prison farms with minimal access to water or food.
    6. Aramark: Known for its monopoly over food service throughout the U.S., this corporation also provides food for hundreds of prisons in America. They may be well-known but that doesn’t mean they don’t have their share of issues; a massive food shortage that affected their service to prisons in Kentucky even caused a prison riot in 2009.
    7. Victoria’s Secret: Inmates in South Carolina sew some of the pricey undergarments sold at this lingerie store. In a famous late 90’s story, two female prisoners came forward and revealed that they were paid to replace already-sewn garments saying “Made in Honduras” tags with “Made in USA” tags. The two inmates were placed in solitary confinement for blowing the whistle on Victoria’s Secret.
    If you see a “Made in USA” tag on something, it’s likely that it was made in an American prison rather than by citizens that aren’t incarcerated. While it’s great that these inmates are learning valuable skills that could help them once they’re released, to say that companies are exploiting these prisoners and making a huge profit at the expense of all American citizens would be an understatement.
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    Default Re: The Big Squeeze:

    11 Major Retailers Closing The Most Stores

    1. Office Depot

    > Closings: 400 (2013-2016)
    > Annual net income: $8 million
    > 1-year share price % chg.: -42%
    > Industry: Office supply
    As workspaces across the country transition from pen and paper to digital tools, traditional office supply retailers suffer. Office Depot has reported losses in six of the last eight years, and is currently in the process of closing hundreds of locations. Another factor leading to these closings may have been the company’s 2013 merger with OfficeMax. The new company needs to consolidate operations and said it will be closing 400 locations by the end of 2016.

    Early last year, rival office supplier Staples announced its intention to acquire Office Depot in an effort to compete against Amazon and other e-commerce companies. The deal requires the approval of both the Federal Trade Commission and the European Commission, and would likely result in more store closings. So far, the EC has approved the merger while the FTC has denied it.


    2. Chlidren’s Place

    > Closings: 200 (2015-2017)
    > Annual net income: $57 million
    > 1-year share price % chg.: 21.1%
    > Industry: Children’s apparel
    Children’s specialty retailer Children’s Place announced in March 2015 it would increase the number of locations it planned on closing from 125 to 200 locations through 2017. This total is greater than nearly every other retailer on this list, and is perhaps more indicative of the company’s problem given its small size.

    As of the end of October 2015, there were only 1,085 Children’s Place stores in North America. In contrast, Walgreens, which is closing the same number of stores, had 8,173 locations as of August 2015. Six years ago, Children’s Place reported a net income of $89 million. Last year, Children’s Place reported a net income of just $57 million.


    3. Walgreens

    > Closings: 200 (2015-2017)
    > Annual net income: $4.2 billion
    > 1-year share price % chg.: -3.8%
    > Industry: Drug stores
    Unlike many companies that are closing stores, Walgreens is doing relatively well. Walgreens Boots Alliance, Walgreens’ holding company, reported a net income of $1.9 billion in fiscal 2014 and more than double that income the year after, at $4.2 billion. Last October, Walgreens announced its intention to buy fellow drugstore Rite Aid for approximately $17.2 billion in cash.

    As part of a restructuring program announced prior to the proposed acquisition, Walgreens will close approximately 200 of its 8,173 stores. As of the end of fiscal 2015, 84 of these closures had been completed. Walgreens, however, would gain the approximately 4,600 stores that Rite Aid currently operates upon the successful acquisition of the former rival. The likelihood of this occurring depends on the approval of U.S. regulators. To win regulatory approval, Walgreens has stated it would sell as many as 1,000 of its own stores.


    4. Walmart

    > Closings: 154
    > Annual net income: $16.4 billion
    > 1-year share price % chg.: -17.9%
    > Industry: Discount stores
    Many of the retailers on this list face concerns about their long-term prospects. While Walmart shares declined 18% in the past 12 months, the company remains the largest company in the country, as well as one of the most profitable. This is the case even as e-commerce sites such as Amazon have eaten into most brick-and-mortar retailers’ bottom lines. The company has recorded a net income of at least $15 billion in each of the past five years.

    In January, Walmart announced it would be closing approximately 270 locations around the world, including 154 stores in the United States, subtracting from its total of roughly 11,600 worldwide. Much of this may be the company optimizing its locations, as it also expects to open several hundred new stores worldwide by the end of 2017, including 60 additional Supercenters.


    5. American Eagle Outfitters

    > Closings: 150 (2014-2017)
    > Annual net income: $80 million
    > 1-year share price % chg.: -2.9%
    > Industry: Apparel stores
    After peaking at $400 million in fiscal 2008, American Eagle Outfitters’ net income has steadily declined over the past decade. Most recently, the company reported a net income of $80 million in fiscal 2015. American Eagle is one of many clothing retailers facing declining sales that announced plans to close stores in the coming years.

    In 2014, American Eagle announced it will close 150 stores over the next three years. To compete in an industry that is rapidly shifting to online commerce, the company said it will roll out a new website intended to be more mobile-friendly.


    6. Finish Line

    > Closings: 150
    > Annual net income: $82 million
    > 1-year share price % chg.: -20.6%
    > Industry: Specialty retail
    U.S. sporting goods and footwear store Finish Line expects to close 150 of its 634 locations this year. While this is less than Wal-Mart’s 154 announced store closures in the U.S., this represents is a much larger share of the company’s total operations. Wal-Mart has more than 4,500 locations in the U.S. — eight times as many as Finish Line’s 550 locations across the country.

    Since 2009, the company has reported positive net earnings, but in the last quarter of 2015 the retailer reported a $22 million operating loss. Shares of the company are down 22% in the past 12 months.


    7. Sports Authority

    > Closings: 140
    > Annual net income: N/A
    > 1-year share price % chg.: N/A
    > Industry: Sporting goods
    Sports Authority is the fourth-largest sporting goods chain in the U.S. In March, Sports Authority announced it was filing for Chapter 11 bankruptcy protection with the intent of restructuring the company. Analysts blame the bankruptcy on Sports Authority’s debt and the company’s failure to adapt to evolving trends in consumer behavior.

    While most locations will remain open, the company announced it will close or sell two distribution centers, as well as about 140 stores — nearly one-third of its approximately 450 U.S. stores. Sports Authority is among the many retailers losing ground to online retailers.


    8. Chico’s FAS

    > Closings: 120 (2015-2017)
    > Annual net income: $65 million
    > 1-year share price % chg.: -24.9%
    > Industry: Apparel stores
    Chico’s FAS is a women’s apparel and accessories retailer selling three main brands: Chico’s, White House Black Market, and Soma. Together, the company operates 1,518 boutiques and outlet stores throughout North America. In 2006, Chico’s FAS reported a net income of $194 million. The company has posted lower annual profits since then, most recently posting a net income of $65 million in 2015.

    Chico’s is one of many clothing stores losing market share to Amazon and other online retailers. Last February, the company announced it would close 120 stores between fiscal 2015 and 2017. Most closings will be of underperforming Chico’s and White House Black Market locations.


    9. Jos. A. Bank

    > Closings: 129 to 139
    > Annual net income: $0
    > 1-year share price % chg.: N/A
    > Industry: Menswear retail
    Tailored Brands, the holding company that owns Jos. A. Bank and Men’s Wearhouse, among other fashion brands, recently announced its plans to close 250 stores during fiscal year 2016. The closures will consist of 80 to 90 Jos. A. Bank stores and 100 to 110 Men’s Wearhouses. The company will also close all 49 Jos. A. Bank outlets, and all nine Men’s Wearhouse outlets. In total, the company is expected to close between 129 and 139 Jos. A. Bank locations in the coming year. Jos. A. Bank was founded in 1905, and with 625 locations is one of the largest menswear retailers in the U.S and Canada. Upon the announcement, which is expected to return Jos. A. Bank to profitability, the Tailored Brands stock price jumped more than it ever has since becoming public in February.


    10. Men’s Wearhouse

    > Closings: 109 to 119
    > Annual net income: $0
    > 1-year share price % chg.: N/A
    > Industry: Menswear retail
    On March 9, holding company Tailored Brands announced massive operating losses, and as a result, said it would close 250 stores in the coming fiscal year. A large share of these will be Jos. A. Bank locations, and the remainder will be Men’s Wearhouse locations. This includes between 100 and 110 Men’s Wearhouse and Tux locations, as well as all nine existing Men’s Wearhouse outlet stores.


    11. Wolverine Worldwide

    > Closings: 100
    > Annual net income: $123 million
    > 1-year share price % chg.: -35.2%
    > Industry: Apparel footwear & accessories
    Wolverine World Wide is one of the world’s largest footwear companies. The company designs, manufactures, and markets products under a range of brands, including Hush Puppies and Keds, as well as licensed footwear products from brands such as Cat and Harley-Davidson.

    Financially, the company has performed relatively well in recent years, although Wolverine World Wide’s operations shrank slightly last year. In 2015, the company reported revenue of $2.69 billion, down 2.5% from $2.76 billion the year before. In response to poor performance, Wolverine cancelled two of its brands, Patagonia Footwear and Cushe, and announced it would close 100 stores this year. The company already closed over 100 stores in 2015.


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    Default Re: The Big Squeeze:

    The World's Most Famous Economic Hitman Confesses – They're Coming For Your Democracy

    Submitted by Tyler Durden on 03/26/2016 21:00 -0400

    Submitted by Mike Krieger via Liberty Blitzkrieg blog,
    Quote Allen Dulles, the CIA director under presidents Eisenhower and Kennedy, the younger brother of Secretary of State John Foster Dulles, and the architect of a secretive national security apparatus that functioned as essentially an autonomous branch of government. Talbot offers a portrait of a black-and-white Cold War-era world full of spy games and nuclear brinkmanship, in which everyone is either a good guy or a bad guy. Dulles—who deceived American elected leaders and overthrew foreign ones, who backed ex-Nazis and thwarted left-leaning democrats—falls firmly in the latter camp.

    But what I was really trying to do was a biography on the American power elite from World War II up to the 60s. That was the key period when the national security state was constructed in this country, and where it begins to overshadow American democracy. It’s almost like Game of Thrones to me, where you have the dynastic struggles between these power groups within the American system for control of the country and the world…

    Absolutely. The surveillance state that Snowden and others have exposed is very much a legacy of the Dulles past. I think Dulles would have been delighted by how technology and other developments have allowed the American security state to go much further than he went. He had to build a team of cutthroats and assassins on the ground to go around eliminating the people he wanted to eliminate, who he felt were in the way of American interests. He called them communists. We call them terrorists today. And of course the most controversial part of my book, I’m sure, will be the end, where I say there was blowback from that. Because that killing machine in some way was brought back home.

    – From the post: How America’s Modern Shadow Government Can Be Traced Back to One Very Evil Man – Allen Dulles
    Most readers will be familiar with John Perkins and his best-selling novel Confessions of an Economic Hitman. What you may not know, is he’s currently making the rounds warning us that all the corporatist mercenary tactics employed against third-world nations to financially benefit U.S. conglomerates are now being turned inward on American communities.

    He discussed some of this in a recent interview with Yes. Here are a few excerpts:
    Twelve years ago, John Perkins published his book, Confessions of an Economic Hit Man, and it rapidly rose up The New York Times’ best-seller list. In it, Perkins describes his career convincing heads of state to adopt economic policies that impoverished their countries and undermined democratic institutions. These policies helped to enrich tiny, local elite groups while padding the pockets of U.S.-based transnational corporations.

    If economic pressure and threats didn’t work, Perkins says, the jackals were called to either overthrow or assassinate the noncompliant heads of state. That is, indeed, what happened to Allende, with the backing of the CIA.

    Perkins has just reissued his book with major updates. The basic premise of the book remains the same, but the update shows how the economic hit man approach has evolved in the last 12 years. Among other things, U.S. cities are now on the target list. The combination of debt, enforced austerity, underinvestment, privatization, and the undermining of democratically elected governments is now happening here.

    Sarah van Gelder: What’s changed in our world since you wrote the first Confessions of an Economic Hit Man?

    John Perkins: Things have just gotten so much worse in the last 12 years since the first Confessions was written. Economic hit men and jackals have expanded tremendously, including the United States and Europe.

    Back in my day we were pretty much limited to what we called the third world, or economically developing countries, but now it’s everywhere.

    van Gelder: So how has this switched from us being the beneficiaries of this hit-man economy, perhaps in the past, to us now being more of the victims of it?

    Perkins: It’s been interesting because, in the past, the economic hit man economy was being propagated in order to make America wealthier and presumably to make people here better off, but as this whole process has expanded in the U.S. and Europe, what we’ve seen is a tremendous growth in the very wealthy at the expense of everybody else.

    On a global basis we now know that 62 individuals have as many assets as half the world’s population.

    van Gelder: Is this the same kind of dynamic about debt that leads to emergency managers who then turn over the reins of the economy to private enterprises? The same thing that you are seeing in third-world countries?

    Perkins: Yes, when I was an economic hit man, one of the things that we did, we raised these huge loans for these countries, but the money never actually went to the countries, it went to our own corporations to build infrastructure in those countries. And when the countries could not pay off their debt, we insisted that they privatize their water systems, their sewage systems, their electric systems.

    van Gelder: I want to ask you about the Trans-Pacific Partnership, and other trade deals. Is there any way that we can beat these things back so they don’t continue supercharging the corporate sphere at the expense of local democracies?

    Perkins: They’re devastating; they give sovereignty to corporations over governments. It’s ridiculous.

    I was just in Central America and what we talk about in the U.S. as being an immigration problem is really a trade agreement problem.

    They’re not allowed to impose tariffs under the trade agreements—NAFTA and CAFTA—but the U.S. is allowed to subsidize its farmers. Those governments can’t afford to subsidize their farmers. So our farmers can undercut theirs, and that’s destroyed the economies, and a number of other things, and that’s why we’ve got immigration problems.

    van Gelder: Can you talk about the violence that people are fleeing in Central America, and how that links back to the role the U.S. has had there?

    Perkins: Three or four years ago the CIA orchestrated a coup against the democratically elected president of Honduras, President Zelaya, because he stood up to Dole and Chiquita and some other big, global, basically U.S.-based corporations.

    He wanted to raise the minimum wage to a reasonable level, and he wanted some land reform that would make sure that his own people were able to make money off their own land, rather than having big international corporations do it.

    The big corporations couldn’t stand for this. He wasn’t assassinated but he was overthrown in a coup and sent to another country, and replaced by a terribly brutal dictator, and today Honduras is one of the most violent, homicidal countries in the hemisphere.

    It’s frightening what we’ve done. And when that happens to a president, it sends a message to every other president throughout the hemisphere, and in fact throughout the world: Don’t mess with us. Don’t mess with the big corporations. Either cooperate and get rich in the process, and have all your friends and family get rich in the process, or go get overthrown or assassinated. It’s a very strong message.
    That is how a once proud nation gets transformed into a rancid, oligarch-controlled Banana Republic.

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    Default Re: The Big Squeeze:

    Greece sells largest port Piraeus to Chinese company

    Published time: 8 Apr, 2016 15:29
    Get short URL



    A man waves goodbye as a ship departs from the port of Piraeus, Greece © Yiannis Kourtoglou / Reuters

    Athens has signed a €368.5 million deal to sell the operator of Piraeus port to the Chinese shipping group COSCO, Reuters reported. This is the second major privatization for the country since last year.


    Under the deal, COSCO will acquire 51 percent of the listed Piraeus Port Authority for €280.5 million and the remaining 16 percent for €88 million after five years, once it concludes mandatory investments. The company will invest €350 million over the next decade, and will pay an annual fee to the Greek state for running the port.

    The Chinese state-owned company was the sole bidder for the port. COSCO already operates the container terminal in Piraeus under a 35-year concession it acquired in 2009. It is investing €230 million to build a second container terminal at the port which it plans to turn into a logistics hub for Chinese exports to Europe.

    The Port of Piraeus is a gateway to Asia, Eastern Europe and North Africa. It handled 16.8 million passengers and 3.6 million 20-foot containers in 2014.

    "Let the ships sailing and bringing the Golden Fleece," said COSCO Chairman Xu Lirong. He added the company will continue to be committed to Greek long-term growth and will invest in upgrading the infrastructure at the port and new jobs would be created.

    Piraeus port workers, however, say they are worried the deal would put their jobs at risk. Dockworkers marched in central Athens on Friday to protest the sale.
    Read more

    "This is not a concession, it's a giveaway of property belonging to the Greek people," said Constantinos Tsourakis, a worker at the port. "Why should China be masters of the game at Piraeus and not the Greek state?"

    The sale of Piraeus is part of Greek creditors' demands to secure a third €86 billion bailout package. It goes against Prime Minister Alexis Tsipras' pre-election promise not to privatize the country’s infrastructure.

    Last August, Athens approved a deal to hand over the operation of 14 regional airports to a German company. The 40-year contract worth €1.23 billion was awarded to Fraport AG, which runs Frankfurt Airport.


    Related:
    Greece accuses IMF of stalling bailout review
    Occupy Athens: 200 leftist activists block Greek Finance Ministry protesting economic reforms
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    Default Re: The Big Squeeze:

    John Perkins is one of the few who seems spot on with his analysis, and doesn't seem to be running a hidden agenda or a distraction.

    This whole ball of wax is a battle I have been losing all my life. When I first entered adulthood, it was already pretty well accepted that there wasn't anything you could vote for that would ever amount to a hill of beans. I figured there was something I could do directly on a regular basis: boycott. I don't give my money to Walmart or McDonald's or anyone like that. I moved out into the country near a town of only around 5,000 to keep that stuff out of my face. What recently opened in my neighborhood? Walmart and McDonald's. >.<

    After that, there is now a plan, to cut the woods, and develop a new little neighborhood.

    It's going to be 50,000.

    I think the more you toe the line in this system, it becomes all you see, and enough of the population is successful to the point where it snowballs and keeps going, no matter how many perish under its weight. At best, most of these places run by making people beg for $8-9 an hour on a part-time basis.

    If you make something with your own hands that sells for $12,000 weekly, they've spent maybe $3,000 in the materials and then you get raked for the rent and electricity, insurance and advertising and all the non-productive employees and trash. They will still act like it's a big deal to give you a few hundred bucks a week. Even a person with a better wage doesn't have anything to really spend back into the community.

    Did anyone notice a few years back, food prices being raised significantly? Everything was blamed on the price of gas. Now someone wrecked gas prices, and it's been a little while now and...food isn't any more affordable.

    The best I can say is that there is a local currency and also an increasing network around the food chain for locally grown organics. But like me versus Walmart, I'm not convinced it's enough to withstand the overall economic situation.

    I saw an opinion recently where someone said that welfare/food stamps/lottery were being used as a cover-up and as a way to plug in the holes over the self-implosion of these businesses as described in this thread.

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    Default Re: The Big Squeeze:

    More excerpts from Sarah van Gelder's interview of John Perkins:


    More Confessions of an Economic Hit Man: This Time, They’re Coming for Your Democracy

    Sarah van Gelder posted Mar 18, 2016

    Twelve years ago, John Perkins published his book, “Confessions of an Economic Hit Man.” Today, he says “things have just gotten so much worse.”





    Twelve years ago, John Perkins published his book, Confessions of an Economic Hit Man, and it rapidly rose up The New York Times’ best-seller list. In it, Perkins describes his career convincing heads of state to adopt economic policies that impoverished their countries and undermined democratic institutions. These policies helped to enrich tiny, local elite groups while padding the pockets of U.S.-based transnational corporations.

    Perkins was recruited, he says, by the National Security Agency (NSA), but he worked for a private consulting company. His job as an undertrained, overpaid economist was to generate reports that justified lucrative contracts for U.S. corporations, while plunging vulnerable nations into debt. Countries that didn’t cooperate saw the screws tightened on their economies. In Chile, for example, President Richard Nixon famously called on the CIA to “make the economy scream” to undermine the prospects of the democratically elected president, Salvador Allende.

    If economic pressure and threats didn’t work, Perkins says, the jackals were called to either overthrow or assassinate the noncompliant heads of state. That is, indeed, what happened to Allende, with the backing of the CIA.

    Perkins’ book has been controversial, and some have disputed some of his claims, including, for example, that the NSA was involved in activities beyond code making and breaking.

    Perkins has just reissued his book with major updates. The basic premise of the book remains the same, but the update shows how the economic hit man approach has evolved in the last 12 years. Among other things, U.S. cities are now on the target list. The combination of debt, enforced austerity, underinvestment, privatization, and the undermining of democratically elected governments is now happening here.

    I couldn’t help but think about Flint, Michigan, under emergency management as I read The New Confessions of an Economic Hit Man.

    I interviewed Perkins at his home in the Seattle area. In addition to being a recovering economic hit man, he is a grandfather and a founder and board member of Dream Change and The Pachamama Alliance, organizations that work for “a world that future generations will want to inherit.”

    Sarah van Gelder: What’s changed in our world since you wrote the first Confessions of an Economic Hit Man?

    John Perkins: Things have just gotten so much worse in the last 12 years since the first Confessions was written. Economic hit men and jackals have expanded tremendously, including the United States and Europe.

    Back in my day we were pretty much limited to what we called the third world, or economically developing countries, but now it’s everywhere.

    And in fact, the cancer of the corporate empire has metastasized into what I would call a failed global death economy. This is an economy that’s based on destroying the very resources upon which it depends, and upon the military. It’s become totally global, and it’s a failure.

    van Gelder: So how has this switched from us being the beneficiaries of this hit-man economy, perhaps in the past, to us now being more of the victims of it?

    Perkins: It’s been interesting because, in the past, the economic hit man economy was being propagated in order to make America wealthier and presumably to make people here better off, but as this whole process has expanded in the U.S. and Europe, what we’ve seen is a tremendous growth in the very wealthy at the expense of everybody else.

    On a global basis we now know that 62 individuals have as many assets as half the world’s population.

    We of course in the U.S. have seen how our government is frozen, it’s just not working. It’s controlled by the big corporations and they’ve really taken over. They’ve understood that the new market, the new resource, is the U.S. and Europe, and the incredibly awful things that have happened to Greece and Ireland and Iceland, are now happening here in the U.S.

    We’re seeing this situation where we can have what statistically shows economic growth, and at the same time increased foreclosures on homes and unemployment.

    van Gelder: Is this the same kind of dynamic about debt that leads to emergency managers who then turn over the reins of the economy to private enterprises? The same thing that you are seeing in third-world countries?

    Perkins: Yes, when I was an economic hit man, one of the things that we did, we raised these huge loans for these countries, but the money never actually went to the countries, it went to our own corporations to build infrastructure in those countries. And when the countries could not pay off their debt, we insisted that they privatize their water systems, their sewage systems, their electric systems.

    Now we’re seeing that same thing happen in the United States. Flint, Michigan, is a very good example of that. This is not a U.S. empire, it’s a corporate empire protected and supported by the U.S. military and the CIA. But it is not an American empire, it’s not helping Americans. It’s exploiting us in the same way that we used to exploit all these other countries around the world.

    van Gelder: So it seems like Americans are starting to get this. What is your sense about where the American public is in terms of readiness to do something?

    Perkins: As I travel around the U.S., as I travel around the world, I see that people are really waking up. We’re getting it. We’re understanding that we live on a very fragile space station, and it’s got no shuttles; we can’t get off. We’ve got to fix it, we’ve got to take care of it, and we’re in the process of destroying it. The big corporations are destroying it, but the big corporations are just run by people, and they’re vulnerable to us. If we really consider it, the market place is a democracy, if we just use it as such.

    van Gelder: I want to push back on that one a little bit because so many corporations don’t sell to ordinary consumers, they sell to other companies or to governments, and so many corporations have such an entrenched reward system where if one person doesn’t perform by exploiting the earth they’ll simply get replaced with somebody else who does.

    Perkins: I’ve recently been speaking at a number of corporate conferences. I hear time after time after time that many of them want to leave a green legacy. They’ve got children, they’ve got grandchildren, they understand we can’t go on like this.

    So what they say is, “Go out there, start consumer movements. What I want is to receive a hundred thousand emails from my customers saying, ’Hey, I love your product but I’m not going to buy it anymore until you pay your workers a fair wage in Indonesia, or wherever, or clean up the environment, or do something.’ And then I can take that to my board of directors and my big stockholders, to the people who really control whether I get hired or fired.”

    van Gelder: I agree, and those campaigns, as you know, have been going on for decades now, and sometimes they have little incremental changes around the edge. But then we look back on it later and we see that there’s enormous resistance because of the profits to be made in continuing the system.

    Perkins: I think we’ve seen tremendous changes, though. Just in the last few years, we’ve seen organic foods become very big. Twenty years ago they couldn’t make a go of it. We’ve seen women having bigger positions in corporations, and minorities, and we need to get better at this.

    We’ve seen the labeling of many foods. GMOs aren’t included yet, but nutrition and calories and so forth are. And what we really need to do is convince corporations that they’ve got to have a new goal.

    We’ve got to let corporations know what their job is: It’s to serve a public interest, and make a decent rate of return for investors. We need investors, but beyond that, every corporation should serve a public interest, should serve the earth, should serve future generations.

    van Gelder: I want to ask you about the Trans-Pacific Partnership, and other trade deals. Is there any way that we can beat these things back so they don’t continue supercharging the corporate sphere at the expense of local democracies?

    Perkins: They’re devastating; they give sovereignty to corporations over governments. It’s ridiculous.

    We’re seeing terrible desperation from people in Central America trying to get away from a system that’s broken, primarily because our trade agreements and our policies toward Latin America have broken them. And we’re seeing, of course, those similar things in the Middle East and in Africa, these waves of immigrants that are swarming into Europe from the Middle East. These terrible problems that have been created because of the greed of big corporations.

    I was just in Central America and what we talk about in the U.S. as being an immigration problem is really a trade agreement problem.

    They’re not allowed to impose tariffs under the trade agreements—NAFTA and CAFTA—but the U.S. is allowed to subsidize its farmers. Those governments can’t afford to subsidize their farmers. So our farmers can undercut theirs, and that’s destroyed the economies, and a number of other things, and that’s why we’ve got immigration problems.

    van Gelder: Can you talk about the violence that people are fleeing in Central America, and how that links back to the role the U.S. has had there?

    Perkins: Three or four years ago the CIA orchestrated a coup against the democratically elected president of Honduras, President Zelaya, because he stood up to Dole and Chiquita and some other big, global, basically U.S.-based corporations.

    He wanted to raise the minimum wage to a reasonable level, and he wanted some land reform that would make sure that his own people were able to make money off their own land, rather than having big international corporations do it.

    The big corporations couldn’t stand for this. He wasn’t assassinated but he was overthrown in a coup and sent to another country, and replaced by a terribly brutal dictator, and today Honduras is one of the most violent, homicidal countries in the hemisphere.

    It’s frightening what we’ve done. And when that happens to a president, it sends a message to every other president throughout the hemisphere, and in fact throughout the world: Don’t mess with us. Don’t mess with the big corporations. Either cooperate and get rich in the process, and have all your friends and family get rich in the process, or go get overthrown or assassinated. It’s a very strong message.

    van Gelder: I wanted to ask about your time spent in Ecuador with indigenous people. I’m wondering if you could talk about how that experience has changed you?

    Perkins: Many years ago when I was a Peace Corps volunteer in the Amazon with the Shuar indigenous people there, I was dying. I got very ill, and my life was saved in one night by a shaman. I’d come out of business school this is 1968, ’69, and I had no idea what a shaman was, but it changed my life by helping me understand that what was killing me was a mindset—what they would call the dream.

    I spent many years studying all this, and working with many different indigenous groups, and what I saw was the power of the mindset.

    The shamans teach us—the indigenous people teach us—once you change the mindset, then it’s pretty easy to have the objective reality change around it. So, instead of the kind of economy we have now, a death economy, if we can change the mindset we can very quickly move into a life economy.

    van Gelder: So what are the mechanisms by which a change in consciousness actually shifts things on the ground?

    Perkins: Well, in my opinion the biggest catalyst that needs to go forward to change this is we’ve got to change the corporations. We’ve got to move from that goal that was stated by Milton Friedman in the 1970s, that the only responsibility of corporations is to maximize profits regardless of social and environmental costs.

    We change the big corporations by telling them we’re not going to buy from you anymore unless you change your goal. No longer should your goal be to maximize profits regardless of social and environmental costs. Make a decent rate of return for your investors, but serve us, we the people, or we’re not buying from you.

    van Gelder : You quote Tom Paine in your book: “If there must be trouble let it be in my day that my child may have peace.” Why did you decide to use that quote?

    Perkins : Well, I think Tom Paine was brilliant in that statement. He understood how that would impact people. And he wrote that statement in December 1776.

    Washington had lost just about every battle he ever fought; he wasn’t getting any support from the Continental Congress; they weren’t giving his men guns or ammunition or even blankets and shoes, and he was bogged down at Valley Forge. Paine realizes that he’s got to somehow write something that will rally people, and there’s nothing that rallies people more than to think about their children.

    That to me is where we’re at right now. I’ve got a daughter and I’ve got an 8-year-old grandson. Bring on the trouble for me, OK, but let’s create a world they’re going to want to live in. And let’s understand that my 8-year-old grandson cannot have an environmentally sustainable and regenerative, socially just, fulfilling world unless every child on the planet has that.

    And this is new. It used to be all we had to worry about was our local community, maybe our country. But we didn’t have to worry about the world. But what we know now is that we can’t have peace anywhere in the world, we can’t have peace in the U.S., unless everybody has peace.


    Sarah van Gelder wrote this article for YES! Magazine. Sarah is co-founder and editor at large of YES!
    Last edited by Hervé; 30th April 2016 at 18:56.
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    Default Re: The Big Squeeze:

    Haunting Pictures Of A Transportation Recession As Freight Rail Traffic Plunges

    Submitted by Tyler Durden on 05/05/2016 07:42 -0400

    Submitted by Wolf Richter of Wolf Street

    Freight Rail Traffic Plunges: Haunting Pictures of Transportation Recession
    292 Union Pacific engines idled in Arizona Desert

    Total US rail traffic in April plunged 11.8% from a year ago, the Association of American Railroads reported today. Carloads of bulk commodities such as coal, oil, grains, and chemicals plummeted 16.1% to 944,339 units.

    The coal industry is in a horrible condition and cannot compete with US natural gas at current prices. Coal-fired power plants are being retired. Demand for steam coal is plunging. Major US coal miners – even the largest one – are now bankrupt. So in April, carloads of coal plummeted 40% from the already beaten-down levels a year ago. The AAR report:
    Quote Rail coal traffic continues to suffer due to low natural gas prices and high coal stockpiles at power plants. Coal accounted for just 26% of non-intermodal rail traffic for US railroads in April 2016, down from 36% in April 2015 and 45% as recently as late 2011.
    Only five of the 20 commodity categories saw gains. Of the decliners, coal was the biggest. But petroleum products also plunged 25%, and grain mill products dropped 7%. Even without coal, carloads were down 3% year-over-year.

    But it’s not just coal. In April, loads of containers and trailers fell 7.5% year-over-year to 1,028,460 intermodal units. They transport goods for retailers and wholesalers. They haul parts, components, and assemblies for manufacturers. They haul imported goods from ports and borders to different destinations across the country, and they haul goods to be exported to the ports and borders. They’re a measure of the real economy.

    For the first 17 weeks of the year, total rail freight fell 7.8% from the same period a year ago, with carload traffic down 14.3% and intermodal down 0.8%.

    But there’s hope, because there’s always hope. AAR Senior VP of Policy and Economics John Gray:
    Quote “We expect non-coal carloads to strengthen when the economy gets stronger, and we think intermodal weakness in April is probably at least partly a function of high business inventories that need to be drawn down before new orders, and thus new shipments, are made.”
    Ah yes, inventories. We’ve long bemoaned their ballooning to crisis levels.

    It didn’t get any better at the end of April: for the week ending April 30, carloads plunged 14.1% and intermodal traffic dropped 8.6% from the same week a year ago.

    The impact on railroads is now very visible – and not just in the numbers on their income statements.

    Here’s how Union Pacific is dealing with this issue, via Google Earth, on May 3: 292 engines idled on a siding west of Benson, Arizona, along I-10, for a stretch of nearly 4 miles. Note how the line of locomotives curves and fades into the left edge of the photo – a once majestic and haunting sight, all these powerful machines idled on a track in the Arizona desert (click images to enlarge):



    These engines are expensive pieces of equipment. When they just sit there, not pulling trains, they become “overcapacity,” and they get very expensive. Then there are engineers and other personnel who suddenly become unproductive. What you see parked here is a drag on earnings. I added the red line for clarity:



    The person who sent me these pictures lives and works in that neck of the woods. He said:
    Quote “I remember back in 2008-2009, hundreds if not thousands of rail cars stacked along I-10 in AZ-NM on side rails. I have not traveled east bound in a couple of years. I suspect rail cars may be piling up. They need to be parked somewhere. We may head over to Carlsbad Caverns in eastern NM soon, and I will keep an eye out…”


    This scenario is playing out across the country, railroad by railroad, perhaps thousands of engines and hundreds of thousands of rail cars – an enormous capital investment – parked mostly out of sight somewhere, “overcapacity” that is now waiting for better days, and the end of the US transportation recession.
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    Default Re: The Big Squeeze:

    Large Truck Orders Continue To Plunge, Down 39% In April
    http://www.zerohedge.com/news/2016-0...-down-39-april
    Quote Class 8 Truck Orders Plunge 39%

    The Wall Street Journal reports Truck Orders Fall in April.
    Last month, trucking fleets ordered just 13,500 Class 8 trucks, the big rigs used on long-haul routes, down 16% from March and 39% from a year earlier. It was the fewest net orders in any April since 2009, FTR said.

    DAT Solutions, an Oregon-based transportation data firm, reported that loads available for dry vans, the most common type of tractor-trailers used for shipping consumer goods, fell 28% in April while capacity on the market was up 1.7% on a year-over-year basis.

    Eaton Corp. , the sales leader in heavy-duty truck transmissions, predicted that organic sales from its vehicles unit will fall 10%-12%, after earlier predicting that sales would drop 7% to 9%. The company lowered its outlook for the business after concluding there are at least 20,000 heavy-duty trucks built last year that are still sitting on dealer lots.

    Engine maker Cummins Inc. said on Tuesday it doesn’t expect any improvement in the truck market later in the year. It now expects heavy-duty truck production in North America to be at 210,000 vehicles this year, down 5% from its earlier view and down 28% from 2015’s actual volume. Cummins’ first-quarter sales of diesel engines to the heavy-duty truck market dropped 17% from a year earlier to $631 million.
    read more here...
    And the conclusions are:
    Quote
    Heavy Truck Sales

    Orders are down, sales will follow, sharply!

    Topping off the the automotive sector please don’t miss About Those Record Auto Sales: Let’s Communicate!
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    Default Re: The Big Squeeze:

    Scenes From The Venezuela Apocalypse: "Countless Wounded" After 5,000 Loot Supermarket Looking For Food

    Submitted by Tyler Durden on 05/13/2016 17:57 -0400

    Over the last several years we have documented with clockwork regularity Venezuela's collapse into failed state status, which was cemented several weeks ago when news hit that "Venezuela had officially run out of money to print new money." At that point the best one could do was merely to step back and watch as local society and civilization turned on itself, unleashing what would ultimately turn into Venezuela's own, sad apocalypse.

    Last night we showed what Caracas, looks like this week:



    As we wrote then these are simply hungry Venezuelans protesting that their children are dying from lack of food and medicine and that they do not have enough water or electricity. As AgainstCronyCapitalism added, this is a country with more oil than Saudi Arabia, and the government has stolen all the money and now they bottleneck peaceful protesters and threaten them with bombs (or haul them to prison and torture them).

    As pure desperation has set in, crime has becomes inevitable. A man accused of mugging people in the streets of Caracas was surrounded by a mob of onlookers, beaten and set on fire, who published a pixeled-out but still graphic video of the man burning as mob justice is now the supreme arbiter of who lives and who dies:

    Quote "Roberto Fuentes Bernal, 42, was reportedly caught trying to mug passersby in the Venezuelan capital, and before police arrived at the scene, the crowd took the law into their own hands."
    The video can be seen here.

    Now, in the latest shocking development, Venezuela saw a new wave of looting this week that resulted in at least two deaths, countless wounded, and millions of dollars in losses and damages.

    According to Panampost, on Wednesday morning, a crowd sacked the Maracay Wholesale Market in the central region of Venezuela. According to the testimonies of merchants, the endless food lines that Venezuelans have been enduring to do groceries could not be organized that day.

    As time went by, desperate Venezuelans grew anxious over not being able to buy food. Then they started jumping over the gates and stormed the supermarket.

    "They took milk, pasta, flour, oil, and milk powder. There were 5,000 people" one witness told Venezuela outlet El Estímulo.

    People from across the entire state came to the supermarket because there were rumors that some products not found anywhere else would be sold there.

    As a result of the massive crowd, the authorities were unable to preserve the peace. "There were 250 people for each National Guard officer… lots of people and few soldiers. At least one officer was beat up because he tried to stop the crowd,” another source told El Estímulo.

    Other food dispensaries run by the government were also looted by the people.

    Far from the promised socialist paradise, as the massive group of people moved, an entrance gate collapsed under the weight of the crowd, leaving several wounded.

    The image below shows a human stampede over rice.

    Quote
    Sumarium ‏@sumariumcom

    #TOP La “estampida humana” en el Luvebras La Florida por arroz regulado http://sumarium.com/el-motin-en-luvebras-la-florida-por-arroz-regulado/ …


    Over the last two weeks, several provinces have hosted scenes of looting in pharmacies, shopping malls, supermarkets, and food delivery trucks. In several markets, shouts of “we are hungry!” echoed. On April 27, the Venezuelan Chamber of Food (Cavidea) reported that the country’s food producers only had 15 days left of inventory.

    PanamPost adds that lootings are becoming an increasingly common occurrence in Venezuela, as the country’s food shortage resulted in yet another reported incident of violence in a supermarket — this time in the Luvebras Automarket located in the La Florida Province of Caracas.


    Venezuelans lost control this week when offered small portions


    Videos posted to social media showed desperate people falling over each other trying to get bags of rice. One user claimed the looting occurred because it is difficult to get cereal, and so people “broke down the doors and damaged infrastructure.”

    In the central province of Carabobo, residents ransacked a corn warehouse located in the coastal city of Puerto Cabello. They reportedly broke down the gate because workers were giving away small portions.

    "There’s no rice, no pasta, no flour,” resident Glerimar Yohan told La Costa, “only hunger.”

    * * *
    Social Collapse Is Inevitable
    With the economy dead, the only thing remaining is to watch as society implodes. To that end, Oscar Meza, Director of the Documentation Center for Social Analysis (Cendas-FVM), said that measurements of scarcity and inflation in May are going to be the worst to date. “We are officially declaring May as the month that [widespread] hunger began in Venezuela,” he told Web Noticias Venezuela. … “As for March, there was an increase in yearly prices due to inflation — a 582.9 percent increase for food, while the level of scarcity of basic products remains at 41.37 percent."


    “We are officially declaring May as the month that hunger
    began in Venezuela,” says an NGO that measures inflation and scarcity

    Meza said the trigger for the crisis is the shortage of bread and other foods derived from wheat.

    “Prices are so high that you can’t buy anything, so people don’t buy bread, they don’t buy flour. You get porridge, you see the price of chicken go up and families struggle … lunch is around 1,500 bolivars… People used to take food from home to work, but now you can’t anymore because you don’t have food at home."

    The is why, Español Ramón Muchacho, Mayor of Chacao in Caracas, said the streets of the capital of Venezuela are filled with people killing animals for food. "Muchacho reported that in Venezuela, it is a “painful reality” that people “hunt cats, dogs and pigeons” to ease their hunger."

    Subsquently, Muchacho warned that Caribbean islands and Colombia may suffer an influx of refugees from Venezuela if food shortages continue in the country.

    “As hunger deepens, we could see more Venezuelans fleeing by land or sea to an island,” Muchacho said.

    And that is how all socialist utopias always end.

    * * *
    Meanwhile, as civil war appears inevitable, as we reported last night there are factions vying to oust Maduro, but signs that he may hang on and force his population to endure more of this socialist nightmare. One can only hope that these shocking scenes remain relegated to the streets of offshore socialist paradises, although Americans should always prepare for the worst in case they eventually manage to make their way into the country.
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    Default Re: The Big Squeeze:



    Sir James Goldsmith on GATT and the devastating effects that it would have on economic, social, political systems .

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    Default Re: The Big Squeeze:

    Behind the Food Lines in Venezuela

    Analysis 14 May 2016 - 09:49 PM

    In another of our articles on the alleged hunger in Venezuela, teleSUR's Iain Bruce looks at some of the underlying causes of the shortages the country is suffering.



    The Symptoms
    This week, the Venezuelan government began raising the controlled prices of several essential food items and other basic goods. The aim is to make it more worthwhile for producers, wholesalers or retailers to sell them, and thereby reduce the incentive to hoard them or divert them onto the parallel, informal market where they go for many times their official price.

    In our previous article, we mentioned this elaborate system of bachaqueo, or reselling. It is the most glaring expression of the food problem in Venezuela, it fuels both the shortage of basic goods, and their exorbitant price.

    The figures speak for themselves. In the last half of April, these were some of the prices that the bachaqueros were selling goods for in the poor area of Petare, in the east of Caracas:


    There are other mechanisms that divert these goods from supermarkets and corner shops, like smuggling abroad and hoarding. But the basic principle is the same. Private sector wholesalers and retailers, as well as corrupt elements in the public system, resist selling at controlled prices, so that they can make much larger profits elsewhere.

    But these are just the symptoms. What really lies behind all of this?

    Has the Government Neglected Production?
    The Venezuelan opposition's parliamentary report on the food situation in the country – the one it drew up to back its claim that there is a humanitarian crisis and seek international intervention – has a fairly simple argument to explain the shortages. The Bolivarian government allowed domestic production to collapse and relied too much on imports. Now it has less dollars to import with, that problem has turned into a crisis.

    This argument contains a grain of truth but it is incomplete, to put it mildly.

    Venezuela's inability to produce goes back decades. From the middle of the last century, the world's number one oil exporter abandoned agriculture and most of its high quality arable land lay idle. By the time Hugo Chavez came to office, only about 9 percent of the population lived on the land, far below the average in Latin America.

    In 2004 and 2005, after winning the recall referendum against him, Chavez launched an offensive to boost local production. “Endogenous development” went hand in hand with declaring that the Bolivarian revolution was heading toward socialism. Land reform began in earnest. Mission Vuelvan Caras began to train the urban poor in agricultural and other skills. Tens of thousands of cooperatives were set up. Almost all of these failed.

    The reasons were many, but one of the most potent was that oil prices began to rise sharply. It was just so much easier to import everything, than to build a whole new system of production. And with more people consuming much more, there was a lot that needed to be imported.

    The Great Import Scam
    Photo: Reuters

    This presented Venezuela's traditional elite with an unexpected opportunity. For they still owned most of the companies that did the importing. Since losing control over the state oil company, they had been desperate to claw back their share of its income.

    They set about developing one of the greatest scams of all time. It was based on acquiring cheap dollars from the Central Bank for false or manipulated imports, and then speculating on the growing gap in exchange rates.

    This is how it worked. Private importer Mr. A applies for US$ 1,000 to import 100 cases of groceries. This costs him 6,300 bolivars (at the government's main preferential rate of US$ 1.00 = Bs. 6.30, in place until earlier this year). Mr. A then has several options. He could decide actually to import all 100 cases. But instead of selling them to his wholesalers at a price based on what he paid, US$ 10 or Bs. 63 per case, he sells them at a price based on the illegal, parallel exchange rate (US$ 1.00 = Bs. 500.00, early last year), that is Bs. 5,000 per case. In other words, he makes a killing in bolivars. But it is much more likely that Mr. A imports only 50 cases, or less, which he sells in the same way and still makes a handsome profit. With the rest of the dollars he was given, 500 or more, he can do several things. He can change them back into bolivars at the parallel rate, but he'd probably rather keep them for a while offshore until the rate goes up even further. Or invest them in something else abroad. Or keep them in his own private dollar account for a rainy day. In other cases, Mr A didn't import anything at all. He basically stole all of the dollars.

    Big private companies in Venezuela did the same thing on a much larger scale. In 2013, the then head of the Venezuelan Central Bank, Edmee Betancourt, said that the country had lost between $15 and $20 billion dollars the previous year through such fraudulent import deals. The Central Bank's own figures show that between 2003 and 2013, the Venezuelan private sector increased its holdings in foreign bank accounts by over US$ 122 billion, or almost 230 percent. In 2014, Chavistas campaigning for an audit of the public debt estimated the total amount lost over the same period through fake imports and similar mechanisms amounted to an incredible US$ 259 billion.

    It is likely that many of the 750 offshore companies linked to Venezuela in the database released from the Panama Papers have been used to recycle this money.


    Billionaire Lorenzo Mendoza runs Venezuela's largest food company, Empresas Polar. A constant threat to murdered Venezuelan President Hugo Chavez, current President Nicolas Maduro has called him an "oligarch of the devil" and has accused him of reducing production and hoarding products to create shortages.

    Venezuela's largest food manufacturer, Polar, has interrupted production several times in recent weeks because, it says, the government hasn't given it the dollars it needs to import its raw materials. But over the years, Polar has been one of the very biggest recipients of preferential dollars for imports. And from somewhere it has found enough dollars to develop new production facilities in the United States and Colombia.

    The Real Economic War
    Smuggled Flour in the Colombian border city of Cucta. Photo: Reuters

    These are the underlying mechanisms that have driven both the shortages and the runaway inflation that Venezuelans now have to live with. As Neftali Reyes, a critical Chavista activist and analyst told teleSUR, “the bachaqueo and smuggling are just a consequence of all this.”

    You can criticize the Bolivarian government for its part in this, and many Chavistas do: for policies that failed to prevent or correct it, or for complicity and corruption at many levels. But it is clear that it is Venezuela's private business and financial sector that has driven this process from the start. And if the figures quoted above are even half right, very few of these businessmen seem to be the earnest but frustrated “producers” depicted in the opposition's parliamentary report.

    ================================================

    The scheme is a very old one, see: France Didn't Have A Revolution
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    Default Re: The Big Squeeze:

    FYI: ThriveLife.com is a good place to check out for emergency preparedness. Most are certified gluten-free, NO GMOs: no bioengineered ingredients, NO artificial colors or flavors.

    I've purchased the fruits, vegetables, and grains which have a shelf life of 25 years and best used within one year of opening to maintain life sustaining nutritional value.

    Too, it’s cost effective if you live in seasonal areas where the price fluctuates, or inclement weather, or time constraints with work and home.

    The customer ratings/reviews are pretty accurate. The site is informative and user friendly.


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    Default Re: The Big Squeeze:

    So it begins. Brazil announces privatization plan that will sell off it's resources and infrastructure to highest bidder

    RT
    Published time: 14 Sep, 2016 10:46
    Edited time: 14 Sep, 2016 14:33
    Get short URL


    Christ The Redeemer is seen during sunrise in Rio de Janeiro, Brazil © Wolfgang Rattay / Reuters

    The new government in Brazil has announced a multibillion dollar privatization plan in an attempt to pull the country’s economy out of the worst recession in eight decades.

    It plans to auction off operating licenses for oil and gas, electricity and infrastructure projects.

    Four airports in the cities of Porto Alegre, Salvador, Florianopolis and Fortaleza are expected to be sold by March, along with two port terminals.

    The government aims to raise $24 billion from the concessions program, and will also offer contracts to private firms for a wide range of projects from building new roads to running mines.

    The program includes the concession of an already built railway as well as the long-delayed auction of rights to oil fields and hydroelectric dams in the first and second half of 2017.

    President Michel Temer, who took charge of the country two weeks ago following the impeachment of predecessor Dilma Rousseff, said the privatization plan will boost growth and jobs.

    “We need to open up to the private sector because the state cannot do everything,” Temer told ministers.

    The concessions will offer “realistic” rates of return and have guaranteed long-term financing from state banks or will be raised on capital markets through bond sales, said Wellington Moreira Franco, who is responsible for boosting private sector involvement in Brazil’s infrastructure.

    “We will restore confidence by expanding the legal security for investors,” he said.
    According to the Organization for Economic Cooperation and Development, Brazil's economy contracted 3.8 percent in 2015, and is expected to shrink a further 4.3 percent this year. Unemployment in the country is in double digits and inflation is nearly 10 percent.

    Read more

    Brazilians should brace for tough times ahead – Finance Ministry
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    Default Re: The Big Squeeze:

    "Well, That's Never Happened Before"

    by Tyler Durden Sep 17, 2016 4:50 PM

    In the history of data from The Fed, this has never happened before...



    Aggregate Auto Loan volume actually fell last week... And less loans means one simple thing... less sales (because prices have never been higher and no one is paying cash)...



    Which is a major problem since motor vehicle production continues to rise as management is blindly belieiving the Hillbama narrative that everything is (and will be) awesome.

    The problem is... inventories are already at near record highs relative to sales (which are anything but plateauing)...



    In fact, the last time inventories were this high relative to sales, GM went bankrupt and was bailed out by Obama.

    The big picture here is simple... US Automakers face a plunge in auto loans for the first time in this 'recovery', and with sales plunging and inventories near record highs, production (i.e. labor) will have to take a hit... and that plays right into Trump's wheelhouse and crushes Hillbama's narrative just weeks before the election.
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    Default Re: The Big Squeeze:

    I love that beautiful photo of Christ the Redeemer Herve

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    Default Re: The Big Squeeze:

    People are raiding the garbage trucks, someone said a zoo was raided and ate a horse..


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    Default Re: The Big Squeeze:

    Class 8 Truck Orders Continue To Plummet Posting 20th Consecutive Monthly YoY Decline

    by Tyler Durden Nov 5, 2016 6:20 PM



    For months now we have been writing about the massive collapse of class 8 truck orders. Just a few days ago we pointed out that order declines are coming just as large public trucking companies around the country are being forced to slash fleets amid slumping demand and slack capacity. According to the Wall Street Journal, several U.S. trucking companies, including Swift, Werner and Covenant, have all been forced to cut 1,000s of trucks from their fleets as "overcapacity has driven down pricing." Of course, all this means that class 8 truck manufactures are unlikely to see an uptick in new orders anytime in the near future with Werner promising it won’t add trucks “until they see meaningful improvement in the freight and rate markets.”
    “We haven’t seen any difficulty in finding trucks,” said Ken Forster, chief executive of logistics company Sunteck Transport Group, a broker based in Jacksonville, Fla., that finds and books trucks for freight shippers. “It’s clear that overcapacity has driven down pricing.”

    In quarterly earnings reports this month, Swift Transportation Co., Werner Enterprises Inc. and Covenant Transportation Group Inc. said they have pulled a combined hundreds of trucks from service since the second quarter.

    Idling trucks is a way large fleets can quickly reduce capacity to match demand, which has stagnated this year amid uneven retail imports and sluggish growth for manufacturers.

    Swift, the country’s largest truckload carrier, counted 581 fewer trucks in the third quarter than it did this time last year, and plans to cut an additional 200 trucks in the fourth quarter. The company’s fleet tops 19,000 big rigs.

    Werner, the fifth-largest U.S. truckload carrier, according to SJ Consulting Group, said it cut its fleet by 240 trucks in the quarter ended Sept. 30 from a year earlier. The company posted a 41% drop in third-quarter net profit, to $18.9 million, and said in its earnings statement that it won’t add trucks “until we see meaningful improvement in the freight and rate markets.”
    Warnings like the one above from Werner do seem to be playing out the monthly net class 8 truck order data. Net orders for the month of October 2016 were down 46% compared to last year. In fact, the level of trailing 12-month net orders is the lowest since January 2011 and down 49% from there February peak.




    Moreover, monthly truck orders have now declined YoY for 20 consecutive months.



    Unfortunately, as BMO's Joel Tiss points out, things are likely to get worse for the class 8 truck OEM's before they get better. With October net orders "much worse than expected" and build rates at 17-18k units, Tiss expects the total backlog to increase to 81-82k units later this month. Moreover, Tiss points out that increasing backlog and softening 2016 orders are likely to put further downward pressure on 2017 and 2018 forecasts for the OEMs.
    With October builds probably in the 17–18K range, we expect total backlog of 81–82K units when reported later this month. October is a closely watched month for truck demand—historically accounting for about 9% of full-year intake—as OEMs roll out next year's models, and big fleets set budgets and start placing orders. Based on this, and combined with an average 26% increase from September (13.9K units last month) and where levels have been running this year, October’s tally is much worse than expected.

    ACT’s 2016 North American Class-8 outlook calls for a 30% YoY drop in production (227K units vs. 323K in 2015) and 19% lower retail sales (251K vs. 310K in 2015). The 2017 forecast assumes another down year for production and retail sales (-11% and -17%, respectively), with particular weakness in the U.S. For 2018 and 2019, ACT believes the 2017 electronic logging device (ELD) mandate will reduce capacity (5–10% expected) and drive overall industry profits higher, resulting in a solid rebound in truck builds. For 2020, ACT sees a strong pre-buy ahead of the second phase of greenhouse gas (GHG) emissions standards starting in 2021, causing another big drop in production that year (-39% forecast).

    With U.S. Class-8-truck demand set to decline another 17% or so in 2017 following a 19% drop this year, we expect to see production cuts that began in 1H16 continue into 2H. Also, we have heard from some large dealers that used-truck inventories remain above optimal levels, weighing on used prices and affecting new trucks as well. The combination of lower production and weaker prices could put more pressure on 2017 and 2018 forecasts.
    But, it's probably nothing.
    Last edited by Hervé; 6th November 2016 at 16:09.
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    Default Re: The Big Squeeze:

    General Motors announce lay off of 2,000 workers in Ohio and Michigan

    Rt Thu, 10 Nov 2016 11:27 UTC


    © Mike Stone / Reuters

    Automobile manufacturer General Motors has announced plans to lay off 2,000 employees at two auto plants in Ohio and Michigan. The employees will be furloughed in January.

    General Motors (GM) announced Wednesday that it would be letting go 2,000 employees in the Midwest as the result of what they believe is a continued shift from small cars to crossovers and trucks. The plants affected by the layoffs build cars for Chevrolet and Cadillac, Fortune reported.

    Both factories will be losing their third shift in January. However, GM will be investing $211 million in the Lansing Grand River facility in Michigan for a new vehicle that still remains a mystery.

    GM will also invest $667.6 million in a different Ohio facility. The Toledo Transmission facility will be able to keep 739 jobs with the investment. An additional $37 million is going to the Bedford Casting Operations in Indiana, where 45 workers will be able to keep their jobs as a result, the Detroit News reported.

    GM has stated that it is committed to keeping small car production in the US. However, they have invested $5 billion in Mexico with little information available about what kind of vehicle they will build there.


    SOTT Comment:
    Americans are borrowing more than ever for new and used vehicles, and 30- and 60-day delinquency rates rose in the second quarter, according to the automotive arm of one of the nation's largest credit bureaus.

    The total balance of all outstanding auto loans reached $1.027 trillion between April 1 and June 30, the second consecutive quarter that it surpassed the $1-trillion mark, reports Experian Automotive.

    See also: U.S. economic recovery? The one trillion dollar consumer auto loan bubble is beginning to burst
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    Default Re: The Big Squeeze:

    State and scenes of panic in India after currency ban

    Jayant Bhandari Acting Man Wed, 16 Nov 2016 04:56 UTC


    © India Times India’s prime minister Nahendra Modi, author of the recent overnight currency ban

    Chaos in the Wake of the Ban
    Here is a link to Part 1, about what happened in the first two days after India's government made Rs 500 (~$7.50) and Rs 1,000 (~$15) banknotes illegal. They can now only be converted to Rs 100 (~$1.50) or lower denomination notes, at bank branches or post offices. Banks were closed the first day after the decision.

    What follows is the crux of what has happened over the subsequent four days.

    Today India is on the verge of a major social-political crisis, unless either the government backs off from the decision of banning the currency or some real magic happens. There is chaos in the streets and daily life is slowly but surely coming to a full halt.

    What Modi did was not only heavy-handed, hugely arrogant, and of no value, it has been very badly implemented to boot — as everything in India always is — and carries the real potential of escalating and snowballing into something horrific. They could have seen that this was not going to end well by simply using primary school math.

    Modi, Nationalism, and the Public School-Indoctrinated Middle Class
    India today is like a cult under the influence of Narendra Modi — in which unlike in the past, not the poorest or uneducated citizens, but mostly members of the so-called educated middle class participate. Over the last two decades, people have been exposed to mass education, TV and nationalistic propaganda without being taught an iota of critical thinking skills.

    In a society in which the concept of reason does not exist, this has made these people receptive to any kind of propaganda with a nationalistic or Hindutva bent. (Hindutva = fanatical Hinduism, which is rapidly metastasizing).

    To aggrandize his position, Modi ordered a lot of military-hardware that India cannot afford, escalated tensions with Pakistan, and conducted what was very likely a fake surgical strike inside Pakistan. This united Indians under the flag.

    Now, the demonetization of the Rs 500 and Rs 1000 banknotes was tagged with nationalism, anti-corruption, and anti-terrorism. Simple-minded, slogan-susceptible persons were hardwired to accept an erroneous causality. Those who did not go along were made to be afraid of being called pro-terrorist elements.

    Those in the middle class have taken what they deem to be the higher moral ground, for they have mostly avoided suffering from the demonetization. Lacking moral instincts — which is unfortunately the case with much of Indian society, given its deep-rooted irrationality and superstitions — they cannot see or feel the pain of those who are suffering, even if that suffering stares into their faces.

    But events are in motion that will likely very soon lead to these salaried members of the middle class starting to feel the pain as well. Their instinctive trust in Modi is likely within weeks of coming crashing down, not because of reasoned argument, but because they will be facing similar problems as the ones the common man is now facing.

    Conversion to the New Currency
    I went to convert my banned banknotes into new ones. The largest amount one can have converted is Rs 4,000 ($60), until further notice. There was a huge rush of people at the bank. Arguments were erupting, as people refused to stand in queues and the banks gave no explanation of what needed to be done. Fights were breaking out.

    Amid the chaos I finally learned that there were three queues I had to go through in a sequence. I had to get a form from one counter, which I had to fill in with my name and address, my ID card details, the serial numbers of all the bills I wanted to exchange, and my cell-phone number.

    At the second counter, I then had to present the completed form along with a photocopy of my ID card. I had to sign on the photocopy which an official then stamped. With my banknotes, the form and the photocopy of my ID card, I then went to the next queue to get my currency converted at a third counter. The whole process took about two hours. For most people in the busier parts of the cities, it took much longer.

    Day 1 of the banks opening (video above). Poor, desperate people, whom the government treats like slaves or perhaps insects. Somehow these people have been brainwashed into thinking they live in a free country. My granddad kept photographs of British royalty on the walls of his office until his final days, for he had realized that the British had treated him much better.

    Anyone who thinks that a country which wastes two hours of every citizen's life to convert his own $60 can ever hope to be an economic power is drinking too much Kool-Aid and cannot do primary level math. Forget any possibility of removing unaccounted for money or reducing corruption, what Modi is doing is a recipe for the destruction of whatever legitimate economy there is.

    That same afternoon, I went to the post office with a friend who wanted to get his money converted. After waiting a long time there, we found out that the post office had run out of cash. Since then most ATMs have had limited amounts of cash available and banks keep running out of cash as well.

    The queues have continued to grow. People start lining up late into the night waiting for banks to open and still have to go back home with no cash. What started with two hours of queuing is becoming an endless slog now.

    The Problems Go Much Deeper


    © Jayant Bhandari An old disabled woman struggling to get her money converted. One has to be utterly heartless not to feel angry about the situation.

    Half of India's citizens do not have a bank account and around 25% do not even have an ID card. These are the country's poorest people, who have no way of converting their money - even if they learn how to do it, which is already a nigh insurmountable hurdle. Also, those who are old, disabled or sick have no choice but to suffer, for without personally visiting a bank branch office, one cannot convert one's banknotes.

    97% of the Indian economy is cash-based. With 88% of all outstanding currency no longer usable, the economy is coming to a standstill. The daily-wage laborer, who leads a hand-to-mouth existence in a country with GDP per capita of a mere $1,600, no longer has work, as his employer has no cash to pay his wages.

    His life is in utter chaos. He is not as smart as Modi — despite the fact that Modi has no real life experience except as a bully and perhaps in his early days as a tea-seller at a train-station. He has no clue where his life is headed from here.

    These people are going hungry, and some have begun to raid food shops. People are dying for lack of treatment at hospitals. Old people are dying in the endless queues. Some are killing themselves, as they are unable to comprehend the situation and simply don't know what to do. There are now hundreds of such stories in the media.

    Small businesses are in shambles, and many will probably never recover. The Hindu wedding season has just started and people are left with unusable banknotes. Their personal and family lives are now an utter disaster.

    Lacking moral and rational anchors, and hence compassion, members of the salaried middle class are unperturbed. Their salaries get taxed and most of the bribes they are getting end up in gold or property investments. In their minds, poor people and small businesses don't matter. In the hypocritical culture of India, as long as the middle class is not suffering — for the time being — they prefer to take what they believe to be the higher moral ground.

    Why This Problem Will Get Much Worse
    Let us do a few simple numbers... What has been made illegal comprises 88% of the monetary value of all currency notes in circulation. In an economy based primarily on cash, the liquidity of cash is the lifeline of the economy. This requires that 88% of the new currency be rapidly dispersed into the market.

    The Indian government has absolutely no history of being able to entertain a project of this type or magnitude ever and after the British left, India's institutions have continued to deteriorate, so hope is not an option. If they fail to issue enough new bills, the very limited supply of Rs 100 notes will disappear within a few days.

    As any rational person has a tendency to store good money while using bad money in transactions, people will hide all newly released currency as well as Rs 100 banknotes until full liquidity is restored. The rich and the well-connected have already done what was needed.

    A reminder of Gresham's law for Modi: "Bad money drives out good money."

    Those who have no need to convert their money as all their cash is already in the banking system (as is the case with the salaried middle class), which they think is making them look like a heroes in the eyes of Modi and is giving them a sense of moral superiority - they are nothing but turkeys being groomed.

    Banks are giving out a mere Rs 20,000 ($300) a week at best. Their lives will suffer and for all intents and purposes, their accounts are frozen. This is Cyprus ten times over - they just haven't realized it yet.

    Whichever way one looks at the above numbers, India's economy is going to start suffocating, within weeks, if not within days. And a serious political and social crisis will take place, which will eventually acquire a life of its own. That is when the as of yet unperturbed salaried middle class wakes up with pain.

    As in any irrational system, it is not reason and morality that will have convinced them to scuttle their hypocrisy and limited vision, but the violence and pain that they themselves will suffer.

    Corruption
    Politicians and bureaucrats of course cannot be seen queuing at the banks. Many bank branches apparently had their cash secretly replaced by the now-illegal bills before the first day of reopening. While no more than two bills of Rs 2000 each should have been collected, those better connected apparently haven't had a problem with this and have been shown showing off packets of the new currency they have. All this cash will do nothing but end up under mattresses, as it has in the past.


    © Jayant Bhandari Politicians with too much corrupt money (now unusable currency notes), who could not convert it beforehand, are distributing it to villagers as loans. Villagers will take the risk with the tax department, including having to hand over a large portion of it as bribes.

    As I walk around, corruption is everywhere and has grown exponentially, not only in financial terms but worst of all, in terms of the humiliation and degradation Indians are suffering. And I don't know how a humiliated, soulless person can be anything but corrupt.

    In village after village people have stopped working, even if they had work, as they can now join the queues at the banks to convert other people's banknotes for a commission. For many young people, this is a wise entrepreneurial decision, as they are making many times the money they would have otherwise made for now.

    But they are being trained to make money from non-productive activities — not from wealth-creation, but from unnecessary problems created by the government. Are they being groomed for a corruption-free society? One has to be naive to respond affirmatively.


    © Jayant Bhandari Sell your now illegal currency for a 20% discount, which young kids can then convert into legal money at the bank

    Fear of the tax authorities means that the level of bribes being offered has gone up. Random people can now impersonate tax officers and collect bribes. People are in the grip of a fear psychosis. Many are emptying their bank deposit boxes, which means that crime will inevitably increase in coming days.

    People are constantly worrying about what Modi's next knee-jerk act might be and how to protect themselves against it. A police state is knocking at the doors.

    A receptive environment has been created in which all kinds of rumors are taking wing. Today, salt is selling for Rs 400 ($6) per kilogram, as rumors have been making the rounds that it is about to disappear. This of course creates a situation in which it willactually disappear. The same is happening with sugar. The largely irrational masses are eagerly devouring a great many random rumors.

    Lesson for Modi: Never, ever destabilize a society that works through conventions rather than reason, for it has no way to return to a normal state of affairs without a huge amount of pain and violence. Simply look at neighboring countries in order to understand this.

    Chronic fear is slowly overtaking the mood of Indians, particularly those who run businesses. They have not only completely lost their trust in the government, but the tax department has been raiding people's premises to scare those who are trying to salvage what they have.

    They have stopped worrying about creating value. Everyone is talking about what to do with the banned banknotes, for even if they are fully accounted for, people fear that the increasingly rapacious tax authorities will make trouble anyway.

    People are now converting whatever they can into gold, silver, and mostly for the first time into the US dollar and other foreign currencies as well, all of which are trading at huge premiums. Money is also moving out of the country. Gold has shot up to as much as $2,800 per ounce, if you can find it.

    Lesson for Modi: The reason people trust Switzerland is because it has hundreds of years of history of protecting private property. Singapore has done an equally good job, but it still lags behind Switzerland, because trust requires a very, very long history of institutional honesty and integrity. India is back to level zero for now. When future generations look back, they will see the current demonetization as the worst event in the history of post-colonial India.

    Finally, the new bills have actually worsened the counterfeiting problem they were supposed to solve. People do not have any experience with what the new banknotes look like. Within a mere three days, counterfeits are already in circulation. Contrary to the government's claims, the new bills are not any more sophisticated than the old ones and are made of simple paper.


    © Jayant Bhandari A mere three days after the first release of the new banknotes, fake currency is already in circulation.

    Why Has the Government Miscalculated?
    The most productive job Modi ever had was running a tea-shop at a railway station, which he then gave up to become a bully. He is a complete stranger to complex thought. He is simplistic in his thinking and does not understand the second-order consequences of his actions.

    First he increased Hindu fanaticism, then he participated in collectivizing people using nationalism, then he created problems with Kashmir through his heavy-handedness.

    He completely failed to liberalize the economy or remove corruption from public life, which is an almost impossible job. Quite ironically, Modi is making it possible for public servants to escape scrutiny, the very people who are the fountainhead of all corruption.

    A simplistic mind is also arrogant. Such a mind — unable to conceive the possibility of unintended consequences — thinks all that has to be done is to issue orders and everything will fall in place. Alas, this may work when shooting innocent people in Kashmir and in other destructive ventures, but when it comes to institutionalizing social progress, a more complex and intelligent approach is needed.

    All of India's institutions have continued to deteriorate since the British have left. They are rotting away and are in shambles. India had some breathing space over the past three decades because of the free gifts of the internet and cheap telephony which it got from the West.

    This has merely made Indian governments more rapacious and so-called educated Indians more arrogant. They collectively lack the capacity to improve India's institutions after having destroyed them. Demonetization may well be the straw that will break the camel's back by accelerating the deterioration of India's institutions toward the point of breakdown, perhaps in weeks if not already in coming days.

    Conclusion - What Can One Do?
    As Indian, be a speculator - even if the government does not like it and will blame you for all ills. Try to keep as much of your money in cash, in Rs 100 notes. Rs 2,000 notes have no value when you go shopping for groceries. Keep a supply of water and dried food sufficient for a few months' needs.

    Cash is disappearing and even before that the economy was stumbling. It might take just one more small domino — more strain on liquidity — to bring about systemic problems in the economy that could bring crucial transactions, businesses and supply lines to a halt.

    If systemic violence spreads, everything will be complicated further. Think of Zimbabwe. It pays to be prepared, particularly when we are ruled by zombies.
    "La réalité est un rêve que l'on fait atterrir" San Antonio AKA F. Dard

    Troll-hood motto: Never, ever, however, whatsoever, to anyone, a point concede.

  40. The Following 4 Users Say Thank You to Hervé For This Post:

    Flash (17th November 2016), Krist (17th November 2016), PathWalker (17th November 2016), RunningDeer (19th November 2016)

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