Riots rage in Chile as gas price hike fuels flames of anger

Riots are raging in southern Chile with two women killed and four others injured. Protesters are out in anger at gas price increases, which are reportedly due to troubles experienced by the state-owned petroleum company. 21 people have been arrested. With gas one of the country's main imports, the price rise counters promises made by the country's President Pinera.

Riots rage in Chile as gas price hike fuels flames of anger

Global economic growth to slow in 2011, says World Bank

The global economy will slow this year, with developing countries such as India and China providing a greater share of growth, the World Bank has predicted.

The bank estimates that global GDP growth will be 3.3% this year against 3.9% in 2010, with emerging markets growing by 6%.

But these rates would not be enough to reduce unemployment in the hardest-hit economies, it said.

The bank warned that "serious tensions and pitfalls" persist.

These included the eurozone debt crisis and the risk of large amounts of capital flowing from low-interest developed economies to higher-interest emerging markets, which could affect currencies.

It also said it was "very concerned about rising food prices".

Continue reading - BBC - Global economic growth to slow in 2011, says World Bank

Currency Crisis: Brussels Plans Bigger Euro Rescue Package

The 750 billion euros earmarked for a rescue fund for Europe's common currency appears to be insufficient. European Currency Commissioner Rehn says he wants to consider "all options" for expanding the rescue fund. Meanwhile, Portugal succeeded in issuing 1.2 billion euros in bonds on Wednesday.

The European currency crisis threatened to worsen on Wednesday. Reports in a handful of newspapers stated that leaders of European Union member states are now making plans to expand the euro rescue fund.

In early 2010, the EU member states agreed to a rescue fund with cash and guarantees worth €750 billion. EU leaders set up the fund in order to protect member states from the threat of bankruptcy. Member states do not pay any money directly into the fund, but they do provide up to €440 billion in guarantees. The European Union also contributed a special credit line of €60 billion together with an additional €250 billion from the International Monetary Fund (IMF).

A report in Germany's Die Welt newspaper states that officials in Brussels are considering raising the amount of money available for loans in the fund -- either through increasing the current €440 billion sum of credit available or through technical changes to the fund. "We have a deceptive calm right now, a credible political signal of decisiveness needs to be delivered to the markets," the paper cited a diplomat as saying.

EU Currency Commissioner Olli Rehn also spoke out on Wednesday in support of expanding the rescue fund. He said the euro zone, the 17 countries that have adopted the euro including latest member Estonia, must consider additional steps. "We need to review all options for the size and scope of our financial backstops -- not only the current ones but also for the permanent European stability mechanism, too," he wrote in a guest column in the Financial Times.

Nervous Markets

News agency Reuters also reported that EU member states, in light of the continuing sovereign debt crisis, want to increase the size of loans available in the rescue fund. The issue is expected to be discussed at a meeting of EU finance ministers next Monday, a source with knowledge of the developments stated.

The Wall Street Journal also reported that European governments are considering an expansion of the euro rescue fund. The report states they want to increase the size of the current €440 billion in guarantees. They are also considering allowing the European Financial Stability Facility (EFSF) to intervene in bond markets. In other words, in the future, EFSF would be able to directly purchase government bonds from crisis-plagued countries. So far, it has only guaranteed repayment of those bonds.

Officials in Brussels say that no decision has been made. But the Wall Street Journal reports that they are urgently needed in order to quiet markets that have again become extremely nervous. Following the crisis in Greece and Ireland, concerns are now growing about Portugal.

The situation is very tight for the European country, which is being forced to pay ever-higher interest rates on its bonds. On Monday, the interest rate for long-term Portuguese loans rose to a record level of 7.3 percent.

Meanwhile, a poll released by Ernst and Young of leading German bankers undercored the gravity of the situation: Around half of those surveyed said they believed at least one European country may soon face insolvency.

Continue reading - Currency Crisis: Brussels Plans Bigger Euro Rescue Package

Chinese Inflation Rises, Threatening Higher Consumer Prices

As China’s booming economy has made its citizens more prosperous, prices for many items, from food to clothing to new cars, have been rising.

BEIJING — When garment buyers from New York show up next month at China’s annual trade shows to bargain over next autumn’s fashions, many will face sticker shock.

They’re going to go home with 35 percent less product than for the same dollars as last year,” particularly for fur coats and cotton sportswear, said Bennett Model, chief executive of Cassin, a Manhattan-based line of designer clothing. “The consumer will definitely see the price rise.”

Inflation has arrived in China. And after Tuesday’s release of crucial financial statistics by China’s central bank, few economists expect Beijing officials to be able to tame rising prices any time soon.

While American importers of Chinese goods will feel the squeeze, the effect on American consumers may be more subtle and the overall impact on United States inflation may be minimal.

There are simply too many other markups along the way — from transportation to salesclerks’ wages — that affect the American retail prices of Chinese-made products. Excluding those markups, imports from China are equal to little more than 2 percent of the overall American economy.

The bigger consumer impact is in China itself. As China’s booming economy enables more of its own citizens to buy the goods pouring out of its factories, Chinese consumers are feeling inflation directly. And Beijing is increasingly worried about the social unrest that could result.

In China, consumer prices were 5.1 percent higher in November than a year earlier, according to official government data. And many economists say the official figures actually understate the rate of inflation, which might in reality be twice as high.

“Four percent, China can bear it — beyond 5 percent, people will complain a lot,” said Huo Jianguo, president of the Chinese Academy of International Trade and Economic Cooperation here.

Higher global commodity prices, as well as rising wages in China, play roles in the increasing cost of Chinese goods. But economists say the main reason for the inflation now is China’s foreign exchange reserves, which surged by a record amount in the fourth quarter.

In China, there is little question that the consumer price index understates the true extent of inflation.

Continue reading - NY Times - Chinese Inflation Rises, Threatening Higher Consumer Prices

Thomas Sowell: Federal Reserve a 'Cancer'

Economist Thomas Sowell explains why he supports Ron Paul's stance on abolishing the Federal Reserve. When asked by Peter Robinson what should replace the Fed, Sowell replies: "When someone removes a cancer, what do you replace it with?"

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Thomas Sowell has studied and taught economics, intellectual history, and social policy at institutions that include Cornell University, UCLA, and Amherst College. Now a senior fellow at the Hoover Institution, Sowell has published more than a dozen books, the latest of which is a revised and updated edition of his classic volume, Basic Economics.

"Through its various editions," Sowell writes, "the fundamental idea behind Basic Economics remains the same: Learning economics should be as uncomplicated as it is informative."

Here, Sowell seeks to uncomplicate some of the economic issues confronting the country today, from the financial crisis and the role of the Fed to the economics of health care and trade imbalances. - Hoover Institution

Thomas Sowell is an American economist, political writer, and commentator. He is currently a senior fellow of the Hoover Institution at Stanford University. In 1990, he won the Francis Boyer Award, presented by the American Enterprise Institute. In 2002 he was awarded the National Humanities Medal for prolific scholarship melding history, economics, and political science.

Peter M. Robinson is a research fellow at the Hoover Institution, where he writes about business and politics, edits Hoover's quarterly journal, the Hoover Digest, and hosts Hoover's television program, Uncommon Knowledge.

Thomas Sowell: Federal Reserve a 'Cancer'

Spanish Bank Protested By Flash Mob Of Flamenco Dancers - Rumba Rave "banquero" en el Banco de Santander

A new form of bank protest?

Rumba Rave "banquero" en el Santander

UPDATE: President Quits, More deaths in Tunisia violence over high unemployment and surging cost of living

The Tunisian government has said it will listen to protesters, after weeks of unrest over high unemployment and the cost of living left dozens of people dead and raised the tensions.

Samir al-Obaidy, the country's communications minister, told Al Jazeera that the government was responding to the unrest.

"The message has been received by the government and all political channels," he said.

"With the backing of the president, we have already put in place urgent measures and allocated $5bn for the development of various areas."

Government officials reported that 14 people were killed since Saturday in clashes between the security forces and protesters in the towns of Thala, Kasserine and Regueb.

However, Tunisian union sources said that the number was at least 20.

In a statement, several political parties and movements, including the Progressive Democratic Party and the Renewal Movement, called on the government to stop the violence.

They called for "a ceasefire and the return of all military and security forces to their compounds", as well as the "release of all detainees including political ones".

The opposition also demanded more freedoms and asked the government to respect the political will of the people.

Continue reading - Tunisia 'to respond' to protests

Massive Protests in Tunisia Push President to Flee


More deaths in Tunisia violence


Tunisia jobless protests rage


VIOLENT PROTESTS IN TUNISIA

BANGLADESH RIOT - Stock market plunge sparks violent protests

Bangladesh suspended trading at its main stock exchange in the capital Dhaka on Monday, and security officials used batons to disperse thousands of angry investors upset over a market plunge. After the protesters began gathering on Monday morning, authorities used batons to try to break up the crowds, according to police officials. But protesters continued to demonstrate at several busy intersections in Dhaka's Motijheel commercial district, where the stock exchange is located, smashing vehicles, burning tyres and chanting anti-government slogans.

Stock market plunge sparks violent protests in Bangladesh

MUST READ - Inflation’s Moral Hazard

Runaway inflation in Germany, which turned money into wallpaper, undermined the Weimar Republic and led to Hitler’s rise.

"An age of loose money not only destroys savings; it corrodes character."

Information from the most diverse sources sometimes coalesces and provokes reflection on a subject to which one has not previously given sufficient thought. This happened to me recently with regard to the effect of monetary inflation on human character. With many observers predicting a substantial rise in inflation as a result of various government spending programs undertaken to reverse the current global downturn, the topic is anything but academic.

During the sixties and seventies, the sums of money of which everyone spoke increased, first by a little and then by a lot (and how nonchalantly we now speak of trillions of dollars or euros!). All that had seemed solid, to paraphrase Marx, melted into air.

Inflation has overturned centuries of economic wisdom, or at least prejudice. When Polonius conferred his parting platitudes on Laertes, one was to “neither a lender nor a borrower be,” and this because a “loan oft loses both itself and friend.” A quarter of a millennium later, Mr. Micawber famously asserted that the secret of happiness was to live within one’s means; and while credit is obviously essential for economic growth, an intuitive difference exists between borrowing to consume beyond one’s means and borrowing to increase one’s means.

Inflation has blurred that intuitive difference. Many times I have received advice, from friends and banks, to borrow as much as I could so that I might buy the best and most expensive house possible. And for many years it seemed good advice, for what could be more advantageous than to buy an appreciating asset with depreciating currency, especially when my income was likely to appreciate faster than the currency depreciated? It was a painless way to become rich.

I did not take the advice—not entirely, anyway. I remained sufficiently a child of the regime of constant prices that I found it difficult to imagine how a sum that seemed vast now would seem trifling in just a few years: caution seemed wiser. Even so, I borrowed within what I thought to be my means, and thereby accumulated assets of a value that I could not have obtained by the steady buildup of savings. The curious result has been that at no point in my career could I have afforded to buy the real estate that I now own, whose value—even now, after a precipitate post-financial-crisis decline—greatly exceeds my cumulative income over the years. If my borrowing had been bolder, the value would exceed my earnings even more.

My situation is no different from that of millions of others, of course. And since we are all richer than we should otherwise be, is there anything, really, to complain about? The problem is that this “richer” represents a curious kind of wealth. I must live somewhere, after all, and everywhere else has appreciated in value, too. I don’t live any better in my house than I did before simply because it is worth three times what I paid for it. Its increase in value is thus of no use to me, unless I want to sell it to live in a less valuable house and invest the difference. An increase in the value of one’s house is therefore a bit like fool’s gold.

During those fat years, a man could sit at home watching television and imagine that he was growing richer thereby. I remember an eminent professor’s telling me, with a barely concealed exultation, that he was making nearly $1,000 per day, week after week, merely by owning a very large house in a fashionable area: an amount that, needless to say, dwarfed any savings he might salt away from his salary. The government could not have been better pleased, for the majority of the population, who owned their own homes, felt prosperous as never before and attributed their affluence to the government’s wise economic guidance.

But asset inflation—ultimately, the debasement of the currency—as the principal source of wealth corrodes the character of people. It not only undermines the traditional bourgeois virtues but makes them ridiculous and even reverses them. Prudence becomes imprudence, thrift becomes improvidence, sobriety becomes mean-spiritedness, modesty becomes lack of ambition, self-control becomes betrayal of the inner self, patience becomes lack of foresight, steadiness becomes inflexibility: all that was wisdom becomes foolishness. And circumstances force almost everyone to join in the dance.

Continue reading - Inflation’s Moral Hazard by Theodore Dalrymple

The American Dream

The AMERICAN DREAM is a 30 minute animated film that shows you how you've been scammed by the most basic elements of our government system. Pretty entertaining but true.

The American Dream

Cameron Warns Governor King Has `Extremely Difficult Task' on U.K. Rates

U.K. Prime Minister David Cameron said recent levels of inflation have been “concerning” as he offered Bank of England Governor Mervyn King his support in the “extremely difficult task” of setting interest rates.

“That is what the Bank of England have to get right,” Cameron told the BBC’s “Andrew Marr Show” yesterday. “I’m in no doubt the inflation is extremely harmful, it destroys people’s savings. We don’t want to go back to having an inflation problem as we had in the past.”

King and the other members of the central bank’s Monetary Policy Committee take their first rate decision of 2011 on Jan. 13, with all 61 economists surveyed last week expecting them to keep rates at 0.5 percent. While inflation was above the government’s 3 percent limit in November for a ninth month, the MPC has to balance that against the likely economic effects of government plans to implement the biggest budget squeeze since World War II.

Cameron, who acknowledged yesterday that this will be “a difficult year,” is looking to the private sector to lead recovery, and today will meet executives from companies including Wal-Mart Stores Inc.’s Asda unit, John Lewis, William Morrison Supermarkets Plc, J Sainsbury Plc and Centrica Plc to discuss their plans to create around 40,000 jobs this year.

Continue reading - Bloomberg - Cameron Warns Governor King Has `Extremely Difficult Task' on U.K. Rates

Pope: God was "behind" Big Bang, Universe no accident

God's mind was behind complex scientific theories such as the Big Bang, and Christians should reject the idea that the universe came into being by accident, Pope Benedict said on Thursday.

"The universe is not the result of chance, as some would want to make us believe," Benedict said on the day Christians mark the Epiphany, the day the Bible says the three kings reached the site where Jesus was born by following a star.

"Contemplating it (the universe) we are invited to read something profound into it: the wisdom of the creator, the inexhaustible creativity of God," he said in a sermon to some 10,000 people in St Peter's Basilica on the feast day.

While the pope has spoken before about evolution, he has rarely delved back in time to discuss specific concepts such as the Big Bang, which scientists believe led to the formation of the universe some 13.7 billion years ago.
When was the universe created by the Big Bang? Six thousand years ago as stated in the Bible? Is the hypothetical Big Bang theory even valid?

Researchers at CERN, the nuclear research center in Geneva, have been smashing protons together at near the speed of light to simulate conditions that they believe brought into existence the primordial universe from which stars, planets and life on earth -- and perhaps elsewhere -- eventually emerged.

Some atheists say science can prove that God does not exist, but Benedict said that some scientific theories were "mind limiting" because "they only arrive at a certain point ... and do not manage to explain the ultimate sense of reality ..."

He said scientific theories on the origin and development of the universe and humans, while not in conflict with "faith", left many questions unanswered.
Why is "faith" so important in describing the universe? Can it prove or disprove anything?

"In the beauty of the world, in its mystery, in its greatness and in its rationality ... we can only let ourselves be guided toward God, creator of heaven and earth," he said.

Benedict and his predecessor John Paul have been trying to shed the Church's image of being anti-science, a label that stuck when it condemned Galileo for teaching that the earth revolves around the sun, challenging the words of the Bible.

Not to forget Nicolaus Copernicus - De revolutionibus orbium coelestium(On the Revolution of the Heavenly Spheres) 1543 which refuted geocentric view universe of the old Bible centuries ago.

Galileo was rehabilitated and the Church now also accepts evolution as a scientific theory and sees no reason why God could not have used a natural evolutionary process in the forming of the human species.

This is perhaps the MOST ASTOUNDING ONE.

The Catholic Church no longer teaches creationism -- the belief that God created the world in six days as described in the Bible -- and says that the account in the book of Genesis is an allegory for the way God created the world.

But it objects to using evolution to back an atheist philosophy that denies God's existence or any divine role in creation. It also objects to using Genesis as a scientific text.

Continue reading - Reuters - Pope: God was "behind" Big Bang, Universe no accident

When scientists come up with a more legitimate theory of reality next time, like the Many-Worlds Interpretation of Quantum Mechanics aka Multiverse theory, maybe Pope will again tell a different story: "God lives in another universe"

Religion is nothing more than a preposterous mind-shrinking falsehood.

Barry Schwartz: Using our practical wisdom

Barry Schwartz studies the link between economics and psychology, offering startling insights into modern life. Lately, working with Ken Sharpe, he's studying wisdom.

In an intimate talk, Barry Schwartz dives into the question "How do we do the right thing?" With help from collaborator Kenneth Sharpe, he shares stories that illustrate the difference between following the rules and truly choosing wisely.

Barry Schwartz: Using our practical wisdom


Also see - Barry Schwartz - The Paradox of Choice and the Loss of Wisdom

PREDICTION IN 2006! - Peter Schiff Mortgage Bankers Speech Nov/13/06

For those people who said no one saw it coming, this presentation is a real eye opener. A highly recommended speech.

Peter Schiff Mortgage Bankers Speech Nov/13/06

MUST READ - Ron Paul 2012? The Stars are Finally in Alignment

"Then everything changed. The housing bubble burst, banks stopped lending, and the Federal Reserve became an object of contempt. It was the world Ron Paul had prophesied, and he had a seductive story to tell about why it had happened—the Austrian [free market economics] story... It does not seem at all far-fetched to think that Paul could have a much greater impact on the race than last time. The Republican primaries are sure to be about economic and size-of-government issues."
-Joshua Green, "The Tea Party’s Brain", Atlantic Magazine Nov. 2010

The Long Road to Prominence

Two time presidential candidate Dr. Ron Paul, the libertarian Republican with a 22 year career in the U.S. Congress in Texas's 14th district, has been fighting against big government his entire career. Known for his advocacy of keeping the government out of citizens' personal and economic lives, he was influenced by the Austrian free market economist Ludwig von Mises who stated that no matter how well intentioned, any attempts by the government to steer the economy would result in malinvestment that would lead to the boom-bust cycle where the pain of the recession would feel far worse than the temporary high experienced during rising economic activity. Mises is known for predicting the Great Depression and he turned down a job offer from Austria's central bank in 1929 knowing that a crash was coming which eventually ended in a hyperinflationary collapse. Similarly, when Richard Nixon took the United States off the gold standard in 1971 and enacted wage and price controls, Ron Paul knew the government's attempt to steer the economy would eventually steer it directly into an iceberg. Not one to go down with the ship, Nixon's interventions gave Ron Paul the impetus to enter politics and he won his first election in 1976 and became a member of the U.S. House of Representatives.

Dr. Paul went against the grain from the very beginning. Representing the party that supposedly advocated free-market economics, Republican Richard Nixon was attributed with the phrase "We are all Keynesians now", referring to British economist John-Maynard Keynes who inspired Franklin Roosevelt's New Deal economic policy during the Great Depression. Ron Paul stresses that the economy was not repaired by New Deal intervention but by the expansion of capitalism through production of consumer goods that was made possible when U.S. soldiers returned home after World War II. Whatever the case, government had made the decision that even after WWII it should be in charge of steering the economy and repairing it, as if it were something mechanical like a watch, when things went wrong. NPR's report concluded that

"One way the economy is not like a watch is that you can repair a watch without politicians. Politicians took the Keynesian message that government spending can be good and ran with it. They paid for the war on poverty and the war in Vietnam. They sent a man to the moon. All the while, they piled up the federal budget deficit, convinced that Keynes gave them a free pass.

Prescribing Keynesianism to some politicians is like prescribing crack to a coke addict. In the 1970s, the patient hit rock bottom. The U.S. had high unemployment, and the Keynesian solution stopped working. The national government spent and spent, but unemployment only got worse. Then came inflation, something Keynesians had no answer for."

Continue reading - Ron Paul 2012? The Stars are Finally in Alignment