The Uberization of Money
The familiar middlemen of 20th-century banking and investing are giving way to something very different. Are we ready for the opportunities—and the risks?
By Zachary Karabell
Robots may shatter the global economic order within a decade
'The pace of disruptive technological innovation has gone from linear to parabolic,' says Bank of America
By Ambrose Evans-Pritchard
The report said the demand for automation is “skyrocketing” as the world’s population ages – with the number of people over 60 expected to rise from 841m to more than 2bn by the middle of the century – and as the once limitless supply of cheap labour dries up in Asia.
The price of an advance robotic welder fell from $182,000 in 2005 to $133,000 last year, and its sophistication is increasing all the time. The standard Baxter collaborative "cobot" that works side by side with people on the factory floor – fixing bolts on a conveyor belt, for example – costs just $22,000.
We are coming close to the crucial “inflexion point” when it is 15pc cheaper to use a robot than to employ a human worker.
Manufacturing wages in China have jumped ninefold since 2000, and the country’s workforce is shrinking. China is already the world’s biggest buyer of robots, making up a quarter of the global market.
Germany and Europe
The indispensable European
Angela Merkel faces her most serious political challenge yet. But Europe needs her more than ever
LOOK around Europe, and one leader stands above all the rest: Angela Merkel. In France François Hollande has given up the pretence that his country leads the continent. David Cameron, triumphantly re-elected, is turning Britain into little England. Matteo Renzi is preoccupied with Italy’s comatose economy.
By contrast, in her ten years in office, Mrs Merkel has grown taller with every upheaval. In the debt crisis, she began as a ditherer but in the end held the euro zone together; over Ukraine, she corralled Europeans into imposing sanctions on Russia (its president, Vladimir Putin, thinks she is the only European leader worth talking to); and over migration she has boldly upheld European values, almost alone in her commitment to welcoming refugees.
It has become fashionable to see this as a progression from prudence and predominance to rashness and calamity. Critics assert that, with her welcoming attitude to asylum-seekers, Mrs Merkel has caused a flood that will both wreck Europe and, long before, also bring about her own political demise. Both arguments are wrong, as well as profoundly unfair. Mrs Merkel is more formidable than many assume. And that is just as well: given the European Union’s many challenges, she is more than ever the indispensable European.
Her personal qualities count for much, too. She has defended Germany’s interests without losing sight of Europe’s; she has risked German money to save the euro, while keeping sceptical Germans onside; and she has earned the respect of her fellow leaders even after bruising fights with them.
Most impressively (and alone among centre-right leaders in Europe), she has done this without pandering to anti-EU and anti-immigrant populists. For all the EU’s flaws, she does not treat it as a punchbag, but rather as a pillar of peace and prosperity.
Mrs Merkel is far from perfect. She is not given to great oratory or grand visions. She can be both a political chameleon who adopts left-wing policies to occupy the centre-ground, and a scorpion who quietly eliminates potential rivals. Her natural caution has given rise to a German neologism, merkeln (“to merkel”, or put off big decisions). Her timidity in handling the euro’s woes deepened the crisis unnecessarily; she has spurned the risk-sharing that the euro area needs to thrive.
Ironically it is boldness, not timidity, that has brought Mrs Merkel the greatest challenge of her time in office. Her staunch refusal to place an upper limit on the number of refugees that Germany can absorb has caused growing consternation at home and criticism abroad. As German municipalities protest, her political allies are denouncing her and eastern European countries are accusing her of “moral imperialism”. With Willkommenskultur fading, there is even talk of her losing power.
The doubts are overblown. Critics are wrong to assume that Mrs Merkel is about to be toppled.
Grumbling aside, she remains the dominant figure of her Christian Democratic Union (CDU). A recent poll found that 82% of CDU members approve of her leadership and 81% want her to run for a fourth term as chancellor at the election due in 2017. The electoral maths favours another CDU-led government. Mrs Merkel is unlikely to go unless she chooses to.
And the naysayers are wrong to suggest she has lost her way on migration. Quite the opposite. During the crisis the Lutheran pastor’s daughter has found a forceful political and moral calling. Mrs Merkel did not cause the onrush of migrants, as her critics maintain. The migrants were coming anyway: she acted to avert a humanitarian disaster. Fences will not hold back the flow. Mrs Merkel can neither stop the wars that drive people out of their homes nor set the policies of the countries they pass through. Her critics offer no plausible alternative. Short of overturning international and European law, and watching refugees drown or die of exposure, EU countries must process the claims of asylum-seekers. The question is: will the process be orderly or chaotic?
Under Mrs Merkel, a four-part policy is taking shape: unapologetically absorb refugees at home; share the burden across Europe and beyond; strengthen controls and the processing of asylum-seekers at Europe’s external borders; and negotiate with transit countries.
This approach is principled and, in the long run, it is the only one that can work. Of course it comes with drawbacks and risks. There are likely to be less-than-principled deals, particularly with Turkey: turning a blind eye to the erosion of civil liberties and the disturbing election victory of President Recep Tayyip Erdogan’s ruling Justice and Development (AK) party, and other concessions, in the hope that he will agree to act as Europe’s gatekeeper.
And there is no denying that the mass influx of refugees is aggravating many of Europe’s other looming problems: it is fraying relations between Germany and eastern European countries just when solidarity is vital to contain Russia’s aggression; it is adding to the burdens of Greece, already crushed by years of austerity and never far from leaving the euro; it is bringing Brexit from the EU closer, too, by giving voters more reasons to leave in Mr Cameron’s promised in/out referendum; and it is stoking populism everywhere.
Gold And Silver - Deception, Not Fundamentals Rule PMs
By: Michael Noonan
There are two things we know for certain about gold and silver: 1. Fundamentals do not apply [currently], and 2. There are no signs to indicate an end to this half-decade old bear market.
There have been many calls for a turnaround in gold and silver since 2013. In fact, the calls were not just for a turnaround, but also calls for $10,000+ gold, and $400+ silver, starting in 2014. It became apparent to us in the first half of 2014 that it would end with a whimper, just as 2013 did, and as 2014 continued, it seemed equally as likely that 2015 may not fare much better, and it not only did not, but it got worse with lower prices and the prospects for still lower prices to come. This puts the first part of 2016 in question.
We chose to comment on the Syria situation over the past few weeks because it seemed to address the fact that gold and silver would not show any signs of a turnaround for as long as situations like Syria exist with zero fear impact to move gold higher. We say fear impact because there is a greater probability that the Middle East, and Syria in particular could ignite WWIII.
It makes no sense to discuss fundamentals as applied to PMs because they are inoperative at the present time, thanks to globalist US central bank manipulation, [throw in the UK].
It is taking far longer than most expected for gold and silver to reflect the incredible world imbalance between issuing endless fiat, corrupting bonds, and hiding everything behind a shadow derivative market. There can be no doubt that ownership of physical gold and silver will reward their holders. It has been proven so throughout time, and it will prove to be the case this time around, as well. Keep buying, keep holding.
The Obama administration is doing everything it can to create the potential for eminent disaster on top of the disaster it has created in creating ISIS as a means of unlawfully getting rid of an elected president in Assad. Saudi Arabia, Qatar, and Turkey are also doing their part to make a bad situation worse to make sure Shiites do not gain any more power or control in that trio's backyard.
If these unfolding events cannot bring to bear any impact on the price of gold, then gold and silver will remain as mired down at low levels as much as the US has remained mired down in its failed policies throughout the Middle East in its destabilization efforts to being about change. Russia's support of Assad has exposed both the duplicity and ineptness of the US trying to get rid of the Syrian president.
Americans live in a media bubble that precludes them from hearing what is actually going on in Syria, even Yemen. Let us back track about 6 or 7 months ago. Russia had proposed a UN Security Council resolution prohibiting the use of Space/Cosmos for military purposes. Guess which country vetoed it? A few weeks later, Russia renamed its Air Force to Air-Cosmic Force.
There was zero media coverage. Absolutely none! Then, just 2 weeks later, a US satellite was blown up, ostensibly because of a "sudden temperature increase."
We will never know what the purpose of the satellite was, but it is odd that this happened, and it is an example of the subsidiary events that do not seem directly linked to the Middle East, yet the common denominator linking the US is Russia. The globalists want Russia subdued into submission, and Obama is doing what he can in the service to the globalists to bring Russia to her knees, but Putin has become an embarrassing thorn in the sides of the globalists and Obama.
Recently, Laura Seal, spokeswoman for the US State Dept, said Russia was bombing Syrian hospitals and killing civilians. When pressed by two reporters, one from RT [Russia Today], she refused to give any specifics. [Hard to justify lies when pressed for the truth.] However, the US has admitted, on record, to bombing a hospital in Afghanistan, a Doctors Without Borders hospital, killing 30. Further, civilians fleeing the hospital on foot were shot down by the planes, according to surviving witnesses.
Not only has there been no US media coverage keeping the American public [un]informed of events, there has been no accountability for the Nobel Peace Prize recipient Obama's failed intervention in Syria being responsible for the loss of over 300,000 lives and the displacement of over 4,ooo,ooo refugees. Instead of trying to defeat ISIS, which the US claims is one of the worst imaginable terrorist organizations, [created, financed, and armed by the CIA], Obama is ramping up ammunition drops to ISIS and other terrorists and sending more troops to Iraq to halt Putin's momentum. The chance of a major war increases everyday.
Syria has officially asked for Russia to intervene, and Syria has also told the US it is neither wanted nor needed. That has not stopped Obama as he and his neocon advisers have decided to put 30 - 50 special ops advisors in Syria, aka boots on the ground, something Obama promised not to do on at least 16 recent occasions. Of course, Obama has an unblemished record for not keeping any of his promises.
[Neocons are all for curtailing civil liberties, free markets, and want to see national identity cards introduced in the US to easier track people].
It is no coincidence that just a few weeks after Russia began bombing ISIS strongholds and killing large numbers, embarrassing the US again, a Russian commercial jet airliner mysteriously exploded in mid-air, killing all aboard. Interestingly, it was the US that was first to claim that a bomb had been placed on board the flight. As another aside, it should be noted that Israel is in charge of Egypt's airport security. [What could go wrong there?]
What led the US to express that conclusion? It had a satellite thermal image of a bright flash occurring just as the plane was destroyed in the air. How interesting the US would be following by satellite a Russian commercial flight out of Egypt that happened to capture the explosion in real-time.
Why would the US be following a routine commercial flight out of Egypt by satellite?
Recall how last summer, 2014, when Malaysian flight MH-17 was shot down while flying over Ukraine. You can bet that the US was closely following this war region by satellite in an area where it had an active interest, yet for some reason, it never spoke out about having satellite images of that flight when actual thermal images existed. For those with short memories, the day after the downing of flight MH-17, Obama announced that the plane was downed by Russia, accusing Putin of being involved. There is a reason why Obama never uttered another accusatory word since, and he certainly never retracted his accusation against Putin.
With the downing of the Russian jet, killing all aboard, how does Obama respond?
On Tuesday November 3rd, U.S. Defense Department spokesperson Laura Seal announced that twelve F-15C air-to-air combat planes are being sent to the Incirlik Turkey Air Base for deployment in Syria against Russia's Su-30 air-to-air combat planes. Neither the F-15C nor the Su-30 can destroy ground-targets, only air-targets -- enemy planes.
It is important to understand that the F-15C planes cannot destroy ISIS ground targets.
Rather, the planes are solely for air-to-air combat. Guess which is the only country authorized to fly in Syrian air space? Yes, Russia. So Obama is deliberately sending in planes that may eventually be used against Russia's Su-30 fighters.
Can there by any doubt in anyone's mind that the US and the Obama regime are deliberately interfering in another sovereign country's affairs, especially after being told the US was not welcome there? The US has been doing everything possible, for decades, to subdue, and destroy, if necessary, Russia? Why else would the US be doing everything possible to place NATO bases as close to Russia as posible?
If, and everyone hopes it remains "if" and not when, WWIII is started, it will be from the direct actions taken by the most aggressions/suppressive nation on the planet, the corporate federal UNITED STATES, owned and directed by the globalists.
Many, if not most Americans still believe the federal government is there to protect them, in some way. We always advocate that people do their own due diligence and not take our word for anything said in these commentaries. Every US citizen was declared to be an enemy of the federal government by an amendment to the Trading With The Enemy Act in 1933. It is harder to verify now on the internet because a lot of information is being "sanitized," but persistence will pay off. The federal government is not why people think.
It was a matter of time before the Federal Reserve fiat issue "dollar" would renew its upward pressure. The Fed is irretrievably caught in its web of fiat self-destruction, at least for the US and a good part of the EU. More than likely, the globalists are grooming the Yuan to replace the "dollar," but China is not prepared to take over that role of the world's reserve currency.
It is not impossible to say China may never take over that role, but if it is to be the globalist's Special Drawing Rights [SDRs] that become the next de facto world currency, China will want to and will play a more important role and have a greater say. Russia and its Ruble remain a question mark.
As we have noted all year, the currency correction has been relatively weak, and weak corrections auger for higher prices. There is no way to know how much higher the deception of the fiat "dollar" will go.
In any/all TRs, a resolve is reached as price moves farther and farther along the RHS of the TR [Right Hand Side]. There will inevitably be signs of some form of ending action that declares the down trend to be finished. We have not yet seen any such sign. The sooner price can make a new recent lower low, the greater the probability that the down trend will end. In that regard, everyone who wants to be bullish should cheer on lower prices, for now.
If the daily chart conveys any message at all, it says the down trend is not over, and the probability of a new recent low is greater, as of last week. The EDM [Ease of Downward Movement], since the mid-October high is an overt statement that sellers remain in full control, and buyers remain unable to help their own cause.
The trend is down, and knowledge of any trend is a one of the most important pieces of information one can have. We have been making this point for the past few years and will continue making it until a change has been confirmed.
Never fight the tape, an old saw that will always remain true.
Compare the TR section from June 2013 through October 2014, with the lower TR from November 2014 to date. The latter, lower TR has smaller ranges and is more compact. This is the market advertising the fact that sellers, while still in control are finding it more difficult to push price lower and faster over the past year. It may be a clue that the end of this protracted TR gets closer to ending.
All that is needed is a form of ending action, and there is none.
The false breakout, 8 TDs ago, looked promising because of the relatively weak correction following the rally at the start of October. We took a small position on the breakout and experienced a small loss. No one can be blamed for getting long, based on developing market activity that had a positive formation, for there was really no way to anticipate the manner in which price did ultimately reverse so quickly.
The use of stops kept exposure at a reasonable level, and stops are a necessary requirement. Anyone who trades without stops is asking for a shortened trading life.
More patience is required in holding gold and silver. Buying and holding still makes sense. The fiat "dollar" cannot and will not survive.
An index of financial secrecy highlights American hypocrisy
Most countries’ scores have fallen since 2013, indicating greater transparency. Among the biggest improvers are the Cayman Islands, once a notorious tax haven, and Luxembourg, which tax campaigners used to call Europe’s “death star” of financial secrecy.
The reason for the shift is the global, austerity-era push for countries to share more information on tax arrangements. Under the fast-spreading, OECD-sponsored Common Reporting Standard, countries will routinely exchange data on each other’s citizens so they can be taxed appropriately in their home countries. Rules on the registration of corporate ownership are being tightened, too, in order to reduce opportunities to hide dirty money in anonymous shell companies.
But America, the country that has arm-twisted so many others to join the transparency revolution, is dragging its feet. It is now the third most secretive jurisdiction, behind Hong Kong and, inevitably, Switzerland (where rumours of the death of bank secrecy have been exaggerated).
America was in the vanguard in the fight against tax havens, first targeting the Swiss, then passing the Foreign Account Tax Compliance Act, or FATCA, which forces financial firms all over the world to spill the beans on their American clients. While demanding concessions from others, however, Washington has made few itself. It has, for instance, failed to engage with the OECD’s data-sharing scheme. Worse, anonymity-friendly incorporation regimes at the state level mean America is unmatched in corporate secrecy.
This matters, because America hosts a lot of offshore business—just ask a billionaire from Caracas or Cairo where he buys property or sets up the shell companies that hold it. The TJN offers a solution: it reckons Europe should mimic FATCA by imposing a stiff withholding tax (it suggests 35%) on payments from Europe to American financial institutions, until America gives as much data as it takes. That would induce wry smiles in Zurich.
The Pharaoh's Dream
Sisi Wants a New Capital City for Egypt
By Nicola Abé
Cairo is an unruly urban sprawl that has spun out of control. Now, officials want to build a new capital in the desert -- a potent symbol of President Sisi's regime. But will it ever happen?
The road ends abruptly. The search for Egypt's new capital city leads into the desert, primrose beneath the hazy sky. Workers speed past a white container in the midday heat, a crane rises into the air, and tire marks can be seen in the sand. "You can't get any closer," says Sayyad al Sabagh, pointing into the distance. "From here it's about 25 kilometers (15.5 miles) to the right." A dune swells on the horizon.
Sabagh is 60 and has worked as a civil servant with Egypt's Building Ministry for the past 24 years. He is sitting inside a red pickup truck, map in hand, and says the highway leading to the new Cairo will eventually have four lanes. "Inshallah," God willing. For now, the asphalt covering the ground will have to suffice as proof. But it is clear the dream has begun. Getting out of the vehicle is forbidden, as is photography.
'A Global Capital'
The Egyptian government has decided to build a new capital city east of Cairo, smack in the middle of the desert. "A global capital," the building minister announced at a conference on the Red Sea in March. At the event, investors from the Gulf states, China and Saudi Arabia gathered around a model of the new metropolis, admiring the business quarter, with its Dubai-style skyscrapers, the small residential homes in greenbelts and the football stadium. The city is to be situated on 700 square kilometers of land, with an airport larger than London's Heathrow. President Abdel Fattah el-Sisi even wooed investors himself. He recently announced that construction would begin in January.
It is to be a capital created in accordance with the wishes of the country's leadership elite. It may not fit well with the country as it currently exists, but it will conform to their vistions of Egypt's future -- a planned, manageable city conceived from the top down in the same way the pharaohs once created the pyramids. The new Cairo will be a beautiful place, an "innovation center," environmentally sustainable, with a high quality of life, city planners are pledging.
They want it to be a city where people can breathe without having to cough.
The old Cairo is an ugly city, an affront to the senses. Even as you begin heading into the city from the airport, the buildings are already blackened from pollution. The cacophony of car horns is painful to the ears and during winter months, the smog hangs like thick fog over the Nile. The city suffers from thrombosis, with streets so crammed with cars they're like clogged arteries. Yet women in high-heel shoes saunter along the banks of the Nile smiling. Even though the place seems unbearable, Cairo is loved.
It is a city of contradictions, created from the bottom up, even though that had never been the intention. It has been growing wildly since the 1960s -- from 3.5 million back then to 18 million now -- against the will of the country's rulers. Fully 11 million people live in structures that were built illegally and new residential districts continue popping up around the city like weeds in a field. The city center is becoming increasingly dense, to the point that, in one of the city's largest cemeteries, people have even converted burial chambers into their living quarters. Cairo is dirty and chaotic, and, of course, it's a city that gave birth to a revolution.
A Capital for 5 Million People
On the drive back, Sabagh, the Building Ministry representative, a small man who wears a pen in his shirt pocket, explains the trouble with Cairo: "Too many Egyptians." The more people there are, the more trouble. In the coming decades, the population is expected to double to as many as 40 million people, which is why officials want to move people out of the city. The new capital is being planned for up to 5 million people, and all government ministries and embassies are expected to make the move.
There's a logic behind Sisi's fondness for major projects. Only recently, a new Suez Canal was christened with considerable hoopla after being completed in record time, even though experts question whether it will ever be profitable. The government largely financed the project by selling sovereign bonds, with money flowing into a fund called "Long Live Egypt." Historian Khaled Fahmy calls it "something to play around (with) for Sisi," since the funds don't have any parliamentary controls attached to them. But given that Egypt's poor economic situation is weighing on all Egyptians, such mega projects bolster the government's reputation and increase its legitimacy.
The people no longer appear to be important in the country now that it has fallen back into its old patterns following the revolution. Parliamentary elections are currently underway, and yet few are bothering to vote. Turnout in the first round was initially reported at 2 percent, despite the government giving civil servants a half a day off so they could cast their ballots -- though in the end, the official figure given was 27 percent. Sisi, the former military leader who was elected president by an overwhelming majority, changed the election law after entering office.
Now, two-thirds of the new parliament will be comprised of individual candidates who are running as independents and have their own money to bankroll their campaigns. The new rules favor the rich elite, which tend to be pro Sisi. Important opposition movements, such as the Muslim Brotherhood and the revolutionary April 6th Movement, have been banned.
Regardless whether or not Sisi ever goes ahead with construction, it is clear that Cairo itself will remain the city of the people. The idea of building a new capital from the top down alone jibes well with the logic of a dictatorship.
A Top-Down Tradition
The idea of rethinking the country on the drawing board is hardly novel. Indeed, Sisi is simply following a long tradition. As far back as the 1970s, autocratic Egyptian governments began building satellite cities in the desert. They carried names like Sadat City or Sixth of October City. A New Cairo has existed since 2000. Officials seemed to believe that the construction of new cities could solve all their problems. More than 90 percent of all Egyptians are packed into the Nile Valley, which represents just a fraction of the country's total land. The official aim had been for a quarter of the population to live outside the Nile Valley, but today less than 2 percent do, says American economist and urban planner David Sims, a researcher who has written several books about Cairo. Because billions flowed into these projects, there was little left over to invest in old Cairo.
On the drive back from the new capital, the red pickup truck drives past several unfinished construction sites and office buildings in places where new suburbs are popping up that, it is hoped, will one day actually be inhabited by people. There are signs to the left and right of the road with names like Hyde Park, Sharouk Gardens or CityGate. Other signs advertise shopping centers with palm tree-lined promenades. "Urban life redefined," proclaims one billboard. But that can be seen are fenced in vacant lots or estates with "for rent" signs in front of them. The red pickup truck is driving down a boulevard of unfulfilled dreams.
Are all the buildings here empty, I ask?
"Most," says Sabagh.
"Many people can't afford the homes. Besides, they want to live where they work, in Cairo."
So what's the point of building a new capital city?
"That's not my responsibility," he says. You'll have to ask somebody higher up.
'I Love My Neighborhood'
Or perhaps lower down. In a narrow alley in the actual capital, a man sits on a plastic chair.
The district is called Ramlet Bulak and it has the reputation of being one of the worst parts in the center of Cairo, a real slum. Karam Ahmad is drinking a tea and smoking a cigarette. His blacksmith shop is located just across the street, and next to it, the entrance to his apartment.
His grandfather lived here, his father and his brothers lived here and now his own children call it home. When asked if he can imagine moving to the desert, he Ahmad answers, "Never."
The plaster is crumbling, the window bars are bent, a street vendor sells fruit and vegetables from a donkey cart. "The homes here may be a little bit run down," Ahmad says, "but I love my neighborhood."
One street away, trash is piled up in a rear courtyard, while due to the lack of space, structures are being built on the roofs of buildings. Ahmad says the neighbors here have agreed not to throw their trash out into the streets and, if need be, he's also perfectly willing to pick up a broom to do some cleaning. While we talk, a cluster of people has grown behind him. "We're lacking the simplest of things," a man in the crowd calls out. "All we want are good streets and schools."
Particularly on the periphery of Cairo, unplanned illegal residential districts are growing rampantly, with millions of people living there. The government largely ignores them and invests little in public infrastructure. Although most of those who live in such slums have access to electricity and water, few other services are offered and sewage and garbage collection are insufficient. Still, Cairo's impoverished districts aren't directly comparable to those in other major cities because there is less crime and less filth here -- in part because local residents have come together to address some of the problems on their own.
'Economic Renaissance' or 'Fiasco'?
But community efforts to organize solutions aren't given much support by the government -- on the contrary. Cairo residents don't even have the right to elect their own mayor. Under the Egyptian system, the office is appointed by the government. "There are not too many people in Cairo nor is there a lack of funds" says historian Khaled Fahmy. He says the problem is a lack of good management and efficient democratic institutions. He argues that building a new capital would be a "fiasco" and that it is exactly the wrong thing to do. "The idea is an expression of contempt for the people and history of Cairo," he says.
The government says the new Cairo will trigger an "economic Renaissance," with the primary aim being that of attracting foreign investment into the country. Egypt is currently suffering from an acute financial crisis because it has used up a large share of its foreign currency reserves. Investments tend to serve the wealthier class, major construction companies and the many companies belonging to the powerful military. Historian Fahmy refers to it as "legal corruption," that is of little benefit to the populace at large.
Cairo, meanwhile, continues to exude a revolutionary air. Despite policies of repression that have resulted in the arrests of thousands, students still continue to protest in front of government buildings. And although the masses of protesters, drums, tents and political graffiti at Tahrir Square have disappeared, the urbane, unruly and well-networked populace here still poses a threat to any autocratic ruler. That's what makes the escapist dream of a desert capital so alluring. Sisi needs a more secure city, one that can be brought under control more easily. He can't leave a behemoth like Cairo to its own devices.
In the evening, the streets in central Cairo are clogged with thousands of cars. Even though only 14 percent of the city's residents own vehicles, traffic remains one of Cairo's greatest unresolved problems. The public transportation system is far from adequate and the city's metro system desperately needs additional lines, but there is currently no concrete plan to build them.
A security guard shakes his head, saying the minister isn't in and hasn't been since this morning. The minister hadn't answered interview requests for weeks and when I ask the guard if anyone can provide me with information about the new capital, he calls a higher-level official.
"I'm not authorized to speak," he says.
"I can't talk about a fish in the sea," says the next.
In the end, a spokeswoman for the minister agrees to talk. In the internal courtyard, a convoy of black Mercedes can be seen parking while inside, cats roam the corridors. Wafaa Bakry's office is ice cold. In hot Cairo, an official's spot in the hierarchy can largely be determined by the intensity of air-conditioning in the office -- and Bakry must be pretty close to the minister.
She keeps anti-bacterial spray on her desk.
Bakry twists in her office chair. "The media," she grumbles, "have misunderstood everything."
She says there will be a bidding process and that no decisions have been made. She runs her finger under her pink headscarf and scratches her forehead. Then she adds that the project is expected to cost about €40 billion ($43.4 billion) during the first stage.
When asked if money has already been found for the project, she says, "None whatsoever so far." She says she also has no idea where it might come from.
Asked if she thinks the new capital will ever actually get built, she responds, "Absolutely. One-hundred percent. The president has announced it, so it will happen."
When the Cult of Central Banking Collapses…
Billionaire power broker Paul Singer thinks easy money policies have failed miserably...
Singer founded Elliot Management, a hedge fund that manages $27 billion. He generated an average annual return of 14% from 1977 to 2012. Remarkably, he only had two down years during that thirty-five year stretch.
Like us, Singer is a big critic of easy money policies. Last month, he said the Fed’s easy money policies have “levitated” stock and bond prices. And this week, Singer warned that reckless monetary policies have set us up for another serious financial crash…
In a letter to his clients, Singer criticized the “obvious failure of monetary extremism” to grow the economy. He warned of “the risks that may exist either in the continuation of the monetary experiment or in its ultimate unwinding.”
Casey readers know the Federal Reserve has been conducting a “monetary experiment” since the last financial crisis. The Fed has held its key interest near zero for the last seven years. This has never been done in modern U.S. history.
The Fed has also launched three rounds of quantitative easing (QE) since 2008. QE is when a central bank pumps cash into the financial system. It’s basically another term for money printing. At this point, the Fed has used QE to inject $3.5 trillion into the U.S. financial system.
• Singer is watching the crises in emerging markets very closely...
China’s economy just had its worst quarterly growth since the Great Recession. Brazil’s currency and stock market have imploded. And while it’s not an emerging market, the bad news we got yesterday from South Korea’s manufacturing sector is signaling a global recession.
Singer thinks these problems could reach the U.S. soon. If that happens, he’s worried about the government’s response.
They will not remain passive in the face of a renewed global recession and/or financial crisis... What policymakers will do, in all likelihood, is hope and pray, and when that fails, they will likely double down on monetary extremism. This landscape is essentially baked, unless you think that sometime in the near future the global economy will turn higher…
Since interest rates in the U.S. are already near zero, doubling down on “monetary extremism” can only mean one thing: more QE. At this point, it’s the only way to keep the easy money flowing.
• Three rounds of money printing have already made many assets absurdly expensive…
The S&P 500 has gained 211% since bottoming in March 2009...U.S. commercial property prices hit a new all-time high in August...and prices for Treasuries, municipal bonds, and corporate bonds are also near record highs.
Nevertheless, the Fed’s easy money policies haven’t helped the actual U.S. economy.
In many ways, the economy is now in worse shape than it was before the last crisis. The real median annual income in the United States has dropped from $57,795 in 2008 to $55,218 today. There are also twice as many Americans on food stamps today than before the financial crisis.
To the average Joe, this doesn’t feel at all like an economic recovery...
Easy money policies have only benefited people who own significant amounts of stocks, bonds, and investment property. In his recent letter, Singer said easy money policies are actually designed to serve the rich.
It is very odd and dangerous that governments, satisfied with policies which, by raising asset prices (stocks, bonds, real estate, high-end art), are seemingly designed to make the rich richer…
• Seven years of easy money have encouraged all sorts of reckless financial decisions…
Americans have borrowed trillions of dollars to buy stocks, bonds, houses, cars, and college educations.
The Bank of International Settlements reports U.S. household, corporate, and government debt jumped from 218% of gross domestic product in 2007 to 239% last year.
Like us, Singer thinks this financial experiment will end badly. He’s on record saying that investors today think central bankers can cure every economic problem…a phenomenon he calls the “cult of central banking.”
However, investors will eventually lose confidence in the cult of central banking. When that day comes, Singer expects the fallout will be disastrous.
...bond markets could collapse in a flight from paper money; stock markets could collapse...commodities markets could drop further (in recession) then soar (with a flight from paper money); inflation could plunge, and then skyrocket...gold prices could spike.
• Like us, Singer thinks gold prices could skyrocket because gold is “real money”...
It’s also the ultimate form of wealth insurance.
People have used gold as money for thousands of years. It has protected wealth through every kind of financial crisis imaginable. It can do the same thing for you when the next crisis hits.
This is why every investor should own physical gold. It’s the first step every person should take to safeguard his wealth. But there are many another straightforward strategies you can use to make sure you weather the next financial storm.
Les doy cordialmente la bienvenida a este Blog informativo con artículos, análisis y comentarios de publicaciones especializadas y especialmente seleccionadas, principalmente sobre temas económicos, financieros y políticos de actualidad, que esperamos y deseamos, sean de su máximo interés, utilidad y conveniencia.
Pensamos que solo comprendiendo cabalmente el presente, es que podemos proyectarnos acertadamente hacia el futuro.
Gonzalo Raffo de Lavalle
Las convicciones son mas peligrosos enemigos de la verdad que las mentiras.
Quien conoce su ignorancia revela la mas profunda sabiduría. Quien ignora su ignorancia vive en la mas profunda ilusión.
“There are decades when nothing happens and there are weeks when decades happen.”
Vladimir Ilyich Lenin
You only find out who is swimming naked when the tide goes out.
No soy alguien que sabe, sino alguien que busca.
Only Gold is money. Everything else is debt.
Las grandes almas tienen voluntades; las débiles tan solo deseos.
Quien no lo ha dado todo no ha dado nada.
History repeats itself, first as tragedy, second as farce.
We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.
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