Daniel Hannan Destroys The 3 Unquestionable Myths Of Our Crisis

Zerohedge presents:

The past and present bailouts of each and every bank (and ‘important’ industry) will, one day, be seen as a generational offense is how MEP Daniel Hannan begins this thoroughly British demolition of the three critical myths surrounding the crisis, that despite market optics, we are still living through. From the idea that capitalism has failed (it has not in his view, it has been ravaged by political pandering), to the crisis being caused by lack of regulation, and that greed is the single-driver of the mess that we remain in; Hannan suggests in a brief but extremely eloquent debate that there is a world of difference between being pro business and pro market as he destroys any semblance of credibility that the political (and elite) class has echoing a young Ron Paul in his thoroughly libertarian free-market sensibilities.

Daniel Hannan | Occupy Wall Street Debate | Oxford Union

Source: http://www.zerohedge.com/news/2013-01-26/daniel-hannan-destroys-3-unquestionable-myths-our-crisis

The World in 2030 Won’t Look Anything Like You Think

None of those things happened. North Korea remains mostly unchanged today — except for its nuclear program, which perhaps poses more of a threat than ever. Not only did the 2008 financial crisis stall most economic growth in the Western world, but personal incomes have largely stagnated as well. Finally, while precision weapons did make the wars in Iraq and Afghanistan less costly in some respects, neither war could be considered small. Few would argue those were examples of a new, high-tech way of fighting.

The U.S. National Intelligence Council’s (NIC) report is supposed to help leaders understand how the world is changing. But its style of analysis has gotten a great deal wrong. So it’s with some skepticism that we should regard the latest release of the NIC’s forecasting report, Global Trends 2030: Alternative Worlds (GT2030).

Unlike previous reports, the GT2030 report tries to account for predictions made in previous versions. What it doesn’t do is grapple with the serious flaws in its overall approach. While some of this year’s predictions are worthwhile, the report fails to account for how badly this same process has served previous reports.

The Global Trends reports tend to be two-sided. They offer specific, big claims that are almost always wrong on the one hand, while smaller, more vague observations about how the world is slowly changing tend to be more accurate on the other. In this sense, NIC predictions read like a Fareed Zakaria book: the really interesting parts that matter never turn out to make sense, while the very obvious things are written about so broadly they can’t help but be right.

This year, GT2030 predicts that “Asia,” defined broadly, will surpass the combined economic and military might of the Europe and the United States. If the rise of a multipolar world doesn’t seem very new, that’s because it was the thesis of Zakaria’s most recent book, The Post-American World , written in 2008. In it, Zakaria predicted that the U.S. would experience a relative decline as other countries, particularly those in East Asia, catch up.

That the United States will be “first among equals” in the future isn’t a terribly fresh prediction for NIC to make, but it does have the virtue of being likely. Similarly, the claim that the BRIC countries (Brazil, Russia, India, and China) are not unified by ideology and are focused on their regional power bases is also likely to be true.

The report does have an important role to play, though. In being published by the NIC, it enjoys immediate credibility among policymakers and politicians — the ones responsible for making important decisions about the planet’s future. The broad trends GT2030 identifies are happening right now, and it is vitally important our leaders understand those trends and try to adapt to them. When GT2030 writes, for example, about conflicts over access to water and the challenges posed by climate change, it’s not exactly breaking new ground — but those are both critical issues that leaders need to understand.

But ultimately, what do these sorts of reports accomplish? The NIC is hardly the only group that publishes studies about future trends. There is an entire industry devoted to futures studies: their acolytes, called futurists, give PowerPoint presentations and write books about how the world will change in the future. I used to work for one: Alvin Toffler, who wrote a groundbreaking book in 1970 called Future Shock . His book, four decades after the fact, remains a fascinating artifact: his description of “information overload” (a term he invented) rings especially true in an age of Twitter and Facebook, but his description of cities running out of oxygen, and disposable clothing made of paper, sounds a bit silly.

Futures studies work best when they’re vague and build upon current trends to their logical (and often extreme) conclusion. Along the way, they usually play into their intended audience’s hopes and fears: economic collapse, infinite growth for the middle class, Malthusian predictions of food crashes, and a belief in the fundamental know-ability of what is to come.

At the same time, any specific prediction in these texts will almost invariably be wrong. And that limits how useful they can ever be beyond a limited scope of activity. It is rare to see government officials or even corporate executives making long-term plans based on a vision of the future laid out in these studies. You just won’t hear someone saying, “We should do this because of GT2030.”

That doesn’t mean this sort of study is useless. The GT2030 report is important for how it’s changing the process and trying to encourage adaptive thinking about the future. It helps leaders understand not just the current trends (which can change on a moment’s notice, in the way the 2008 recession undid all the previous predictions of forever-growth), but also how to be flexible enough to adapt to rapid change.

Leaders should look at reports like GT2030 and think about how they can evolve current institutions to be more adaptable and flexible in the future. It seems odd to think that the decentralized world GT2030 describes is going to be met with institutions that were designed in the 1940s.

Related Notes

Association of Professional Futurists – What Is A Futurist?What is a Futurist? A professional futurist is a person who studies the future in order to help people understand, anticipate, prepare for and gain advantage from coming changes. It is not the goal of…

Strauss–Howe generational theory – Wikipedia, the free encyclopediaStrauss–Howe generational theory From Wikipedia, the free encyclopedia The Strauss–Howe generational theory, created by authors William Strauss and Neil Howe , identifies a recurring generational cycl…

Source: http://www.theatlantic.com/international/archive/2012/12/the-world-in-2030-wont-look-anything-like-you-think/266108/

News Spot (with Future Implications) 9/11/12

# Chinese President Hu Jintao on Nov. 8 set a new target for economic growth, saying that the country should double its 2010 gross domestic product and per capita income for urban and rural residents alike by 2020, Xinhua reported. The goal is to make China’s development much more balanced, coordinated and sustainable, Hu said.

# British Prime Minister David Cameron and German Chancellor Angela Merkel met for an hour in London on Nov. 7 for an “open, warm and friendly” talk about the EU budget Nov. 7, the prime minister’s office said, BBC reported. Cameron said before the meeting that the EU budget should be frozen or cut, while Merkel believes an increase is necessary. Officials said discussions on the issues between the two leaders would continue.

# Spain continues to present impossible ideas to deal with its impossible economic situation. The country currently has just €37 billion in cash available. It somehow plans on buying €60 billion worth of bad bank assets. Spain has five regions requesting bailouts leaving just €3 billion in funds available for any other regions that face a shortfall (there will be more). Spanish banks continue to draw over €400 billion from the ECB… up from €300+ in June. And on top of this, the country needs to raise €207 billion next year while keeping rates low (http://gainspainscapital.com).

# The US re-entered recession in June 2012. They are now facing the fiscal cliff again with the threat of tax hikes hitting in early 2013. We also have $16 trillion in debt and are running our fourth $1+ trillion financed by the US Federal Reserve which bought over 70% of all US Treasury issuance last year (http://gainspainscapital.com).

News Spot (with Future Implications) 2/10/12

  • Bill Gross Co-CEO of Pimco twits: Fed will write $1trillion or more checks in nxt 12 mons/ECB wl write same. Reflation ahed. Will create asset bubbles but little growth
  • It seems the French will have to learn the hard way the effect a 75% tax on the rich. We should see the impact of this new tax within 6 months. The Hollande government appears to have little understanding of how an economy functions and may well take even further steps to suffocate the country. Avoid the French stock market and French bonds.
  • The number of unemployed in Spain rose by 1.7 percent from August to September and now stands at 4.7 million, AFP reported Oct. 2. Unemployment has increased by 11.3 percent since September 2011. Madrid faces pressure from the European Union, the Spanish regions and an increasingly discontent population.
  • There could be roughly 100 million barrels of oil and 2 trillion cubic feet (TCF) of natural gas in the East China Sea around the Senkaku Island being bitterly argued by China, Japan and Taiwan. Chinese sources show resource estimates of 160 billion barrels and 250 TCF of natural gas. If the Chinese sources were correct, this area would have more oil than the entirety of Iran.

News Spot (with Future Implications) 27/09/12

  • Tens of thousands of protesters demonstrated outside Greece’s parliament on Sept. 26 against austerity measures, the BBC reported. A strike included doctors, teachers, tax workers, ferry operators and air traffic controllers. The Greek government is looking for ways to cut 11.5 billion euros ($14.7 billion) from the country’s budget.
  • The European Commission on Sept. 26 extended Dexia’s clearance by four months, giving the failed bank until the end of January 2013 to put its restructuring plans in place and receive state guarantees from France, Belgium and Luxembourg worth 55 billion euros ($71 billion), AFP reported. Before its collapse, Dexia was a leading source of financing for the Belgian government. Without it, Brussels will have to find another way to raise money on international markets to cover its spending activities.
  • FT is reporting: Spain has entered a constitutional crisis. The decision of Catalonia’s nationalist government to call a snap election in November – which in practice will amount to a referendum on independence – has opened the way to Catalan secession. That decision, in turn, may give a lift to Basque separatists, now running neck and neck with mainstream nationalists in regional government elections due next month, after winning the largest number of Basque Country seats last year in local and general elections.

As a Spain trapped in the eurozone crisis tries to battle its way through a wrenching   recession, it must now contemplate the real possibility that its pluri-national state, which replaced the suffocatingly centralist Franco dictatorship with highly devolved regional government, may break up.

News Spot (with Future Implications) 24/09/12

  • Turkmenistan and Azerbaijan have enough natural gas reserves to meet European demand, Azerbaijani Industry and Energy Minister Natig Aliyev said Sept. 18, Trend.az reported. According to Aliyev, Turkmenistan and Azerbaijan have 7 trillion cubic meters and 2.5 trillion cubic meters of natural gas, respectively. The two countries hope to supplant Russia as a natural gas source for Europe.
  • A small bomb exploded and wounded at least one person in a kosher grocery store in Paris on Sept. 19, AP reported, citing the Jewish Community Protection Service, an agency that tracks anti-Semitic attacks in France. Two people dressed in black threw the device into the store in the suburb of Sarcelles at lunchtime and fled. According to the Sipa news agency, four people were injured.
  • Greece’s budget deficit has reached about 20 billion euros ($26 billion), preliminary estimates by the International Monetary Fund, European Central Bank and European Commission show, Spiegel reported Sept. 24. The Greek government has been negotiating to find more than 11 billion euros in spending cuts in order to meet the requirements of international lenders.

News Spot (with Future Implications) 17/09/12

  • Spain’s public debt has reached 75.9 percent of gross domestic product, the highest level in a century, at 804.3 billion euros ($1.05 trillion), the Bank of Spain said Sept. 14, Typicallyspanish.com reported.
  • US 30 Year Treasury Bonds rose sharply last week after the announcement of QE3. QE programs are typically supposed to force long term interest rates lower. The debt markets are signaling something else.
  • Here is the outline of the Fed’s plan: buy hundreds of billions of home mortgages annually in order to push down mortgage rates and push up home prices, thereby encouraging people to build and buy homes and spend the extracted equity on consumer goods. Furthermore, the Fed hopes that ultra-cheap money will push up stock prices so that Wall Street and stock investors feel wealthier and begin to spend more freely. He won’t admit this directly, but rather than building an economy on increased productivity, production, and wealth accumulation, he is trying to build one on confidence, increased leverage, and rising asset prices. In other words, the Fed prefers the illusion of growth to the restructuring needed to allow for real growth. (By Peter Schiff – Operation Screw)
  • European finance ministers meeting in Cyprus over the weekend suggested they were in no rush to resolve key outstanding issues. Policymakers have decided to defer action on three issues: a sovereign bailout for Spain, a decision on Greece after the country requested a two-year extension on bailout terms, and a common supervisor for Europe’s banks.
  • China filed a case with the Dispute Settlement Body of the World Trade Organization against the United States on Sept. 17 regarding its amendment of the Tariff Act of 1930, China’s envoy to the WTO said, Xinhua reported. China alleged unfairness in how the United States calculates penalty tariffs. The United States also filed a case with the WTO against China, alleging unfair subsidies for auto exports, The New York Times reported. The United States, European Union and Japan had previously brought up complaints that China had improper export restrictions on some of its raw materials.

Quote for the Weekend

“If you’re rich you get a bailout. If you’re poor you get a handout. And if you’re middle class you get left out. ” That’s not a sustainable way to run the system, exclaims investment strategist Keith Fitz-Gerald.

News Spot (News Spot (with Future Implications) 20/08/12

  • Finland is preparing for a potential breakup of the eurozone, Finnish Foreign Minister Erkki Tuomioja said Aug. 18, one day after Austria called for a legal mechanism by which to leave the eurozone, AFP reported.
  • The FT reports economists are starting to realize the possibility of a “hard landing” for China as predicted by Emerging Events. Hulloooo! Read the report here…. http://www.ft.com/cms/s/0/cc05e828-e860-11e1-8ffc-00144feab49a.html
  • According to information obtained by SPIEGEL, the troika of the International Monetary Fund, the ECB and the European Commission recently determined that Athens is facing a budget shortfall of up to €14 billion, and not the €11.5 billion previously reported by Greece.
  • California’s July sales tax revenue was down 33.5% from the budget approved in late June. Even more ominously, the state’s $9.6 billion cash deficit that was rolled over from the June 30th fiscal year has catapulted to $18 billion last month. The state has avoided default by temporarily borrowing from state trust funds, but those accounts will soon need their cash back to continue operating. Today California quickly began trying to sell $10 billion in municipal bonds to fund the record $28 billion they need to keep the lights on.  With tax revenue plummeting and the state already the second lowest rated credit in the country, if the independent credit rating agencies downgrade the state to “junk bond”, California will be short up to $18 billion and default.    
  • Meetings between Germany, Greece and Spain this week may have a bearing on the direction of world markets very soon.

News Spot (with Future Implications) 15/08/12

News Spot (with Future Implications) 15/08/12

• Italy’s public debt hit a record 1.97 trillion euros ($2.43 trillion Euractiv reported Aug. 14. The annual budget deficit grew by 1.1 billion euros year-on-year, to 47.7 billion euros, largely as a result of Italy’s share of bailouts for other states, the bank said. Italy’s benchmark bond yields stayed close to 6 percent.

• The assault on freedom is just beginning. History shows that as governments slide into insolvency, the state traditionally attempts to INCREASE its level of control over the people– wage controls, price controls, capital controls, border controls, etc. (Simon Black from Sovereignman)

• US Federal Reserve Economists Warn About Municipal Bond Market. In hte article they point out muni bond defaults are more prevalent than most casual observers are aware. They expect that the hangover from the recession will affect both state and local governments and the economy for years to come. Some of the actions taken to address short-term funding needs can increase the severity of the long-term structural challenges that states and localities face, including underfunded pension plans and deficient infrastructure stocks. Until these challenges are successfully resolved, the state and local public sector may continue to be a drag on economic activity in the years ahead. Read the full article here.

Portugal’s economy contracted by 3.3 percent in the second quarter of 2012, according to Portugal’s National Statistics Institute, Macauhub reported Aug. 15. The statistics show a contraction of 1.2 percent of the country’s gross domestic product against the first quarter, caused by lower internal demand. Also in the second quarter, Portugal’s unemployment rate rose to 15 percent of the active population from 14.9 percent in the first quarter, meaning there are over 820,000 people without work, the institute said.

News Spot (with Future Implications) 06/08/12

  • Spain is more than 900 billion euros ($1.1 trillion) in debt, and 8 billion euros in interest payments must be met in 2013, Spanish Prime Minister Mariano Rajoy said after an Aug. 3 Cabinet meeting.
  • Bill Gross of Pimco tweets: Happy 1-year USA-debt downgrade anniversary everyone! Washington has done nothing since & fiscal cliff looms. Not good Uncle Sam!
  • Standard & Poor’s on Aug. 6 affirmed the downgrades of 15 Italian banks and downgraded 15 more, AP reported.
  • Italian Premier Mario Monti said that disagreements within the 17-nation euro area are detracting from the policy response to the debt crisis and undermining the future of the European Union. He also warned over the weekend of tensions that “bear the traits of a psychological dissolution of Europe.” ~Der Spiegel