Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Category Archives: Economics

Rio Gets $900M Emergency Disbursement From Gov’t for Olympics

This article appeared online at TheNewAmerican.com on Monday, June 20, 2016:  

Português: Placas promovendo a candidatura do ...

On Friday, just seven weeks before the Rio 2016 Olympic Games are to begin, the governor of the state of Rio de Janeiro, Francisco Dornelles, declared a financial emergency, saying that his state has run out of money.

In his official statement, Dornelles said the state — which is helping the city of Rio prepare for the Games, which begin on August 5 — is facing a “public calamity,” adding:

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In Venezuela, the Elite Meet to Eat While the Masses Starve

This article appeared online at TheNewAmerican.com on Friday, June 17, 2016:  

Another version of the flag of Animal Farm, ba...

Another version of the flag of Animal Farm, based on the flag of the Soviet Union. Hoof and horn symbol created by Al2.

On Monday OPEC gave Venezuela more bad news: Oil production fell another 120,000 barrels a day in May, putting further pressure on the socialist regime of Nicolas Maduro to pay its bills and maintain order. On Tuesday more than 400 citizens of Cumana, a city of 800,000 a few hundred miles west of Caracas, were arrested following another food riot.

On Thursday the British tabloid Daily Mail published a dozen pictures of the wealthy elite enjoying themselves at the opulent Caracas Country Club where membership costs $110,000. The slums where the masses are starving can be seen in the background.

The contrast, startling as it was, illustrates how socialism — called Chavismo in “honor” of former president Hugo Chavez — ultimately decimates the middle class and

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Elon Musk’s Conversion from Saint to Sinner

This article was published by The McAlvany Intelligence Advisor on Friday, June 10, 2016:  

English: Tesla Roadster Sport 2.5, the fourth-...

Tesla Roadster Sport 2.5, the fourth-generation Roadster from electric carmaker Tesla Motors Inc.

Once upon a time Elon Musk said he believed in hard work, technology, and some breaks to gain success. He didn’t believe the U.S. government should provide subsidies to companies, and he believed that the free market would provide the “best solution” to such problems as pollution. At the time, Stanford University Professor Fred Turner called him out for being a hypocrite:

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Elon Musk: Once an Entrepreneur, Now a Crony Capitalist

This article appeared online at TheNewAmerican.com on Thursday, June 9, 2016:  

In the early days, Elon Musk (shown above) made his fortune the usual way: by creating products and services that people could use, which they paid for using their own money, to improve their lives. Today, however, he has found a better way: using taxpayer guarantees to help fund his new ventures and reduce his risks while he enjoys the profits if they succeed.

In simple terms, Elon Musk has become a welfare queen on steroids,

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Obama Does a 180 on Social Security; Now Wants to Expand Its Benefits

This article appeared online at TheNewAmerican.com on Monday, June 6, 2016:  

Social Security (play)

In a breathtaking reversal that far-left progressives are calling a victory, President Obama said in a speech in Elkhart, Indiana, on Wednesday that Social Security benefits should be expanded and made more “generous”:

And then we have to tackle retirement security. That’s something that keeps a lot of people up at night. … Let’s face it — a lot of Americans don’t have retirement savings. Even if they’ve got an account set up, they just don’t have enough money at the end of the month to save as much as they’d like because they’re just barely paying the bills. Fewer and fewer people have pensions they can really count on, which is why Social Security is more important than ever.

 

We can’t afford to weaken Social Security. We should be strengthening Social Security. And not only do we need to strengthen its long-term health, it’s time we finally made Social Security more generous and increased its benefits so that today’s retirees and future generations get the dignified retirement that they’ve earned. And we could start paying for it by asking the wealthiest Americans to contribute a little bit more. They can afford it. I can afford it.

This was met with huzzahs from the Left. Hillary Clinton tweeted,

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Something is Wrong When A “Fine Arts” Major Has to Defend Social Security

This article was published by The McAlvany Intelligence Advisor on Monday, June 6, 2016:  

Following President Obama’s statement last Wednesday that Social Security benefits ought to be expanded and made more “generous,” someone at the Washington Post thought it would be a good idea to tout the wonders of that welfare state program. Rather than pick someone with some credentials as an economist, even a liberal one, the Post instead picked Jared Bernstein (above) to do the honors. Which he did:

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$60 Oil “Very Possible” Says Saudi Arabia’s New Oil Minister

This article was published by TheNewAmerican.com on Friday, June 3, 2016:  

On November 17, gas prices had dropped to $1.9...

On November 17, gas prices had dropped to $1.99 in Bakersfield, California, due to falling Oil prices

Following the OPEC meeting on Thursday, Saudi Arabia’s new oil minister, Khalid Al Falin, told CNN that $60 a barrel oil is “very possible” by the end of the year, with even higher prices expected next year. He said that supply and demand in the oil market have “converged” without the OPEC cartel needing to curtail supply. In short, OPEC is celebrating its strategy of letting the lowest oil prices seen in years weed out the weak and marginal players in the United States, resulting in cuts in production. As Qatar’s oil minister exulted at a press conference in Vienna following the meeting, “The worst is over for oil.”

Translation:

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United States No Longer First in Global Competitiveness

This article appeared online at TheNewAmerican.com on Wednesday, June 1, 2016:  

English: Cropped version of Thomas Jefferson, ...

Thomas Jefferson

According to a study just released by the International Institute for Management Development (IIMD), the “U.S. economy is no longer the most competitive and pro-business in the world.” It has held the top spot for the last three years but has, thanks to increasing government regulation and taxation, slipped to third place. Said Arturo Bris, IIMD’s director, “The U.S. still boasts the best economic performance in the world, but there are many other factors that we take into account when assessing competitiveness. The common pattern among all of the countries in the top 20 is their focus on business-friendly regulation, physical and intangible infrastructure and inclusive institutions.”

Based on its analysis of more than 300 criteria, the United States no longer excels based on

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Edict From Venezuela’s President Maduro: Grow Your Own Food

This article appeared online at TheNewAmerican.com on Friday, May 27, 2016:  

                            No Hay Comida is translated: There is no food

Word got out that there would be chicken for sale at the Central Madeirense supermarket in Guarenas, Venezuela, on Friday, so Kattya Alonzo got there at 4 a.m. The line of others already snaked around the block, waiting for the delivery trucks to arrive.

But when the trucks arrived at 6:30, the national guardsmen monitoring the crowd sensed the possibility of a riot and ordered the trucks to move on. The people waiting in line turned ugly and

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Venezuela Collapsing; U.S. Officials Fear Violence, Military Coup

This article appeared online at TheNewAmerican.com on Wednesday, May 18, 2016: 

Seal of the C.I.A. - Central Intelligence Agen...

U.S. intelligence officials warned on May 14 that Venezuela is descending into economic and political chaos that is likely to end in street violence, military suppression of citizens’ rights, and a possible coup to remove President Nicolás Maduro.

How much of that reflects CIA interventions to keep the crisis somewhat under control is an open question. But one of those anonymous “intelligence officials” told the Wall Street Journal that “[our] goal is to mitigate the crisis that they’re experiencing. It’s in the United States’ interest that Venezuela not bottom out.”

If past experience serves as a guide for the future, the CIA could

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Brazil’s Interim President Says “Trust Me,” Installs Corrupt Bureaucrats

This article appeared online at TheNewAmerican.com on Monday, May 16, 2016:  

Upon taking over Brazil’s presidency from disgraced former President Dilma Rousseff on Thursday, interim president Michel Temer asked his skeptical citizenry to “trust” him, saying that his new administration would be Brazil’s “salvation”:

Trust me. Trust the values of our people and our ability to recuperate the economy…. It is essential to rebuild the credibility of the country abroad to attract new investments and get the economy growing again…. It is urgent to restore peace and unite Brazil. We must form a government that will save the nation…. It’s urgent to seek the unity of Brazil. We urgently need a government of national salivation.

Even if he truly intended to do any of that, the challenges he faces almost defy description.

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Trump Suggests National Debt “Deal,” Media Calls It “Fanciful” and “Dangerous”

This article appeared online at TheNewAmerican.com on Monday, May 9, 2016:  

A snippet from Donald Trump’s conversation with CNBC on Thursday raised the ire of numerous media commentators, who called Trump’s plan “unprecedented” (CNBC), “fanciful” and a “threat” (New York Times), and “tantamount to a debt default” (Yahoo Finance). Others called his remarks “reckless,” while Tony Fratto, a former Treasury official in the George W. Bush administration said, “This isn’t a serious idea — it’s an insane idea.”

What sparked the ire? The initial impetus was when Trump said, “[The U.S. Treasury is] paying a very low interest rate. What happens if that interest goes up two, three, four points? We don’t have a country. I mean, if you look at the numbers, they’re staggering.”

Indeed they are. The U.S. Debt Clock shows the national debt closing in on $20 trillion, while the economy is slumping along, with a GDP at just over $18 trillion. Put another way,

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A Tipping Point in Texas? It’s Building Its Texas Bullion Depository Bank

This article was published by The McAlvany Intelligence Advisor on Friday, May 6, 2016:  

Description: Newspaper clipping USA, Woodrow W...

Description: Newspaper clipping USA, Woodrow Wilson signs creation of the Federal Reserve. Source: Date: 24 December 1913 (Photo credit: Wikipedia)

A modest bill, getting little press and clothed in innocuous terms, could spell the end of the Federal Reserve’s monopoly on its “federal reserve note” currency. When Texas Governor Greg Abbot signed it into law almost a year ago, he said:

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Texas Contracts to Build Nation’s First State Gold Bullion Depository

This article appeared online at TheNewAmerican.com on Thursday, May 5, 2016:  

The Texas Comptroller’s Office has begun to receive bids from private contractors interested in building the country’s first state gold storage facility, the Texas Bullion Depository (TBD). When Texas Governor Greg Abbott signed into law the bill providing for it last July, he said it was all about saving fees being paid to store the state’s gold in New York banks:

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Puerto Rico to Default on $422M Payment Today; Likely Another $2B in July

This article appeared online at TheNewAmerican.com on Monday, May 2, 2016:  

Puerto Rico continued its “death spiral,” with its failure to make a $422 million interest payment on Monday on some of the island’s gigantic $73 billion debt. This comes on the heels of missed payments over the last year, and will be followed up by a $2 billion payment due on July 1, which it is also widely anticipated to miss. The payment is due from the island’s Government Development Bank (GDB), the main bond issuer and the island’s fiscal agent.

So far Governor Alejandro Garcia Padilla (above) has, as noted previously in The New American, been able to keep the lights on and the water running by moving money around on the island’s balance sheet, paying only those with the highest and most enforceable claims and dealing as best he can with those holding lower credits. It was Padilla who said his island was in a “death spiral” as far back as last July, because his 3.5 million inhabitants, half of whom live in poverty, didn’t have the money.

But for decades Padilla and his predecessors acted as if they did have it,

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What Happens After Venezuela Destroys its Currency?

This article appeared online at TheNewAmerican.com on Friday, April 29, 2016:  

English: THE KREMLIN, MOSCOW. At a joint press...

Hugo Chavez and Vladimir Putin

Venezuela is unable to pay its currency printers. Those printers have been flying in planeloads of currency in the middle of the night, landing at airports where it is offloaded onto trucks to be dispersed to banks throughout the country. In other words, Venezuela doesn’t have the money to pay for its money.

The destruction of the currency, the bolivar fuerte (“strong bolivar”), has been documented at The New American and elsewhere. When oil prices dropped, so did revenues to fund the various socialist welfare schemes put in place by the communist Hugo Chávez and continued by his protégé, Nicolás Maduro, at Chavez’s passing in March 2013. Instead of reining in those unaffordable programs, socialist economists instead decided to print their way out of the crisis.

The results were predictable, and catastrophic.

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Have Oil Prices Hit Bottom?

This article appeared online at TheNewAmerican.com on Thursday, April 21, 2016:  

The 40 percent increase in the price of crude oil just since the end of January prompts two questions: Have investors seen the bottom in oil prices, and have drivers seen the lows in gas prices?

Todd Garner, the managing partner at Protec Energy Partners hedge fund, thinks so:

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Is $40 Oil the New Normal?

This article was published by The McAlvany Intelligence Advisor on Friday, April 22, 2016:  

To the consternation of traders short the market, crude has jumped from $30 a barrel in late January to over $40 currently, with many indicators pointing to still higher prices. Was $30 the bottom? What will be the new ceiling?

Every bull market rises from the ashes of fear, disgust and despair. Traders and investors reasonably expected oil to bottom at well below $30, perhaps in the 20s, with some heavyweights, including Goldman Sachs, suggesting even lower prices. Some took short positions, certain that their calculus was correct: OPEC had maxxed out, American production seemed impervious to precipitous declines in rig counts, China’s economy was faltering and signs of recession were continuing to expose themselves around the globe, including the U.S. What could go wrong?

A little energy company, Callon Petroleum, showed exactly what could go wrong. Three times in the last six months the company has sold new shares to raise equity, and three times the company’s stock has risen. Logic and experience would suggest that dilution of shares would reduce their price. But with Callon, shares jumped from $4.21 in the middle of January to nearly $10 currently.

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Nothing is Likely to Change in Brazil

This article was published by The McAlvany Intelligence Advisor on Wednesday, April 20, 2016: 

One of Warren Buffett’s favorite expressions is “when the tide goes out, everyone will see who’s been swimming naked.”  In Brazil the tide went out at the start of the Great Recession and now the whole world can see who was swimming naked.

When President Lula was elected in 2002 the commodity boom was underway, and Brazil was enjoying the ride. Its major exports are soybeans, sugar, and iron ore, and under Lula Brazil’s GDP was running 10 percent a year. Lula implemented major expansions of the welfare state, including putting in place such generous pension plans that state workers could retire at age 54 for men and at age 52 for women at 90 percent of their final pay. The average Brazilian’s household income rose, and statists worldwide pointed to Brazil’s success story, naming it as one of the BRIC countries that would soon overtake the developed nations of the world, and doing it while expanding government spending.

But when Dilma Rousseff took over in 2011 the Great Recession was revealing the true nature of spending far beyond the ability of the economy to sustain it. In 2014 the government’s finances were in such dreadful shape that

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Have Oil Prices Hit Bottom?

This article appeared online at TheNewAmerican.com on Thursday, April 21, 2016:

The 40 percent increase in the price of crude oil just since the end of January prompts two questions: Have investors seen the bottom in oil prices, and have drivers seen the lows in gas prices?

Todd Garner, the managing partner at Protec Energy Partners hedge fund, thinks so:

Keep reading…

Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.