Collapsing Global Trade Growth Foreshadows Crash

The other week I took my son out to fly a drone we got him for Christmas – an aerial device that can hover and record video as it flies through the air.

We didn’t get him a top-of-the-line model – after all, he is just 7 years old – but it can still fly about 100 yards before you have to follow.

My son had flown the drone before, so I assumed he had piloting it down well enough to land it before entering the nearby woods… I was wrong.

I turned my back for literally 30 seconds, and he had already flown the drone as high as it could go, allowing it to drift directly over a wooded area about 50 yards from where he was standing. And, as if on cue, the drone plunged right into the middle of the woods.

At this point my son was pretty upset, as was I.

But I could only imagine how he felt as one of his favorite Christmas presents slipped farther and farther away before it was gone…

That feeling of seeing something you really enjoyed unexpectedly crashing is something I think central banks around the globe can relate to right now…

Global central banks have used every scrap of available monetary power to help the global economy take flight… yet nothing has gone quite according to plan.

The economy is now in the process of crashing back to earth, and central banks have no control and no buffer to even slow the situation down.

The result of this dangerous mix is a dire outcome for the global economy that will send us plunging into a stock market crash.

Into the Woods

As proof that the global economy is already on a downward spiral, the World Trade Organization (WTO) lowered its trade growth forecast for the year to just 1.7%, down from previous expectations for growth of 2.8%. The WTO also lowered its 2017 growth expectations.

Sure, 1.7% is still growth, but it’s modest and fading.

Trade growth is important to the global economy because it’s a signal of how healthy things really are. If trade is expanding, it leads to economic growth as countries buy more goods, thus creating new jobs and providing more money for corporations.

With trade growth slowing, we see yet another sign that the bull market is running out of steam.

But the important part that truly reveals how the situation has slipped out of central bankers’ hands is that trade growth is now less than global gross domestic product (GDP) growth, which is expected to come in at about 2.2%.

A five-tenths-of-a-point difference doesn’t sound like much, but it marks the first time global trade will grow at a slower pace than world GDP since 2001 – and that’s a big deal.

Don’t forget that when this same situation last occurred back in 2001, the S&P 500 shed 30% during the year and the Nasdaq Composite (tech stocks) plunged 50%.

Out of Options

It’s highly likely we will see a similar scenario play out really soon.

The markets are at the tail end of an eight-year bull market, and instead of major economic indicators pointing to overheated growth, we are experiencing modest growth at best… and even that is slowing.

What’s more, central banks have literally thrown everything at their disposal at the economy over the past few years in order to prop up growth – quantitative easing, low interest rates, negative interest rates, etc. With interest rates at all-time lows (and even negative in many places), central banks have left themselves with practically no room for additional accommodative policies. In other words, they have run dry on ways to help in times of economic turmoil.

So, as global central banks sit back and watch the buttons they have pressed fail to deliver the robust economic growth they were meant to create, it’s only a matter of time before the stock market experiences one of its worst plunges in history.

You need to crash-proof your portfolio now for when that day finally comes.

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A REAL Wellness Case for Eliminating Tax Exemptions for All Religions

When people donate to religious groups, it’s tax-deductible. Churches don’t pay property taxes on their land or buildings. When they buy stuff, they don’t pay sales taxes. When they sell stuff at a profit, they don’t pay capital gains tax. If they spend less than they take in, they don’t pay corporate income taxes. Priests, ministers, rabbis and the like get ‘parsonage exemptions’ that let them deduct mortgage payments, rent and other living expenses when they’re doing their income taxes.

Source: Garry Linnell, Religions Should Lose Their Tax-Exempt Status, The Age, October 1, 2016.

Introduction: Australia – Few Believers But Lots of Favors for Religion

Australia is a nation of non – believers. The Age article stated that two-thirds of the population do not believe in a god(s). Furthermore, only eight percent of Australians regularly attend church and 84 percent strongly believe that religion and the state should be kept separate. (Immigration policies are somewhat friendly toward Americans – something to keep in mind if the Deplorables have their way on November 8.)

In Australia, annual subsidies/tax-exempt supports for religion are estimated to cost all taxpayers $30 billion annually. Yearly income by the religion sector in Australia was $104 billion in 2014; the chief purpose of more than a third of this sum was the advancement of religion.

In America It’s Much Worse

The situation Downunder mirrors the reality in America. Our laws and other government policies blatantly require secular society to pay a large share of the costs of religions. That in itself is horrific, but what makes it grotesque for most secularists is the sense that political religion is a baleful element. It promotes discrimination, intolerance, restrictions on personal freedoms, constant incursions of dogma and rituals upon the public square and schools, all while undermining science (e.g., creationism) and reason. To think that secularists, now estimated to constitute at least a third of the adult population, are paying for toxic superstition and dreadful social ills, seems preposterous and outrageous.

And no wonder: it IS preposterous and outrageous.

The REAL Wellness Connection

Three years ago, subsidizes to the faith-based among us cost all taxpayers at least $71 billion. This, however, does not include local income and property tax exemptions, the sales tax exemption and – most importantly – the charitable deduction for religious giving. The estimated value of religious properties is at least $600 billion, but probably much more because the above figure does not include properties owned by religions besides actual churches, mosques, etc.

Source: Dylan Matthews, You Give Religions More Than $82.5 Billion A Year, Washington Post, August 22, 2013.

Enthusiasts for and practitioners of REAL wellness, which promotes reason and liberty, will want to do what little they can to repair and defend the battered wall of separation that malicious politicians pandering to the faithful have undermined in this country for more than a century.

Besides the blatant unfairness of taxation policies that compel non-believers to bear substantial costs of our national religiosity, this situation is outrageous for two other principal reasons:

Religious leaders (i.e., devout politicians in Congress/the states and local levels, televangelists, political activist organizations, etc.) continuously seek to lower the fragile wall of separation between church and state and complain relentlessly about imagined threats to their freedoms while advancing discriminatory policies, intolerance and restrictions on reproductive and other freedoms.
Religions undermine reason and promote nonsense, which does nothing to advance, and plenty to undermine, mental well being and national harmony. Whereas science uses logic, research and experiments to shed light on the nature of the cosmos, religions offer myth, fear and childhood exploitation (AKA indoctrination of the young). Religions advance many beliefs that cloak natural realities in the darkness of superstitions while compromising an accurate appreciation of life on Earth.

America: Increasingly Secular, Except for the Political Class

The tax exempt custom became official in America in 1894, though churches were unofficially tax-exempt since the founding. All 50 US states and the District of Columbia exempt churches from paying property taxes. Donations to churches are tax-deductible. Clery pay nothing for their homes provided by religious institutions. Justice William Douglas, in a 1970 dissent in the case of Walz v. Tax Commission of the City of New York, stated: If believers are entitled to public financial support, so are nonbelievers. A believer and a non-believer under the present law are treated differently… (by virtue of) a financial benefit to religious institutions, government is supporting religion.

There is nothing in the U.S. Constitution that grants tax exemption to churches. It is considered a privilege, owing to a once unchallenged belief that religion makes a positive contribution to every community. That, of course, is a fertile topic for a national discussion, followed by periodic referenda. (Personal forecast of what would result if there were such a national discussion: For a while, religious privilege would survive, but in time, as educational systems improved, the public might, in the works of Richard Gere’s shyster lawyer character Billy Flynn, catch wise.)

A few additional concerns about the gross subsidy of religions can be briefly noted:

Churches get automatic tax exemption; other non-profits must file for exemptions. Unlike secular tax-exempt 501(c)(3) charities, churches need not file reports, a loophole that facilitates fraud and lesser misuses. (Look up the Rev. Jim Jones and Jonestown, Catholic pedophile priests, or any of the richest televangelists – and remember – you helped pay for it all.)
Religions are active in the public square, injecting their ideas about moral questions (e.g., abortion rights and marriage equality) based upon sacred creeds derived from medieval holy books.
George W. Bush’s faith-based initiative, continued during President Obama’s two terms, allows religious welfare organizations to use public funds to proselytize clients with their assorted dogmas.
In 1991, TIME Magazine described Scientology as a thriving thriving cult of greed and power and a hugely profitable global racket. Yet, the religious organization was granted federal income tax exemption in 1993 which, according to a Times article, saved the church tens of millions of dollars in taxes.
The Alliance Defense Fund, a Christian legal group, organizes what it calls Pulpit Freedom Sunday every October. The purpose? To encourage pastors to defy IRS non-partisanship rules by endorsing (nearly always Religious Right) candidates from the pulpit. In 2011, more than 500 pastors did so. None of the churches involved lost exemption status.
The Freedom from Religion Foundation (FFRF) has shown that tax subsidies mean all Americans pay for the extravagantlifestyles of megachurch pastors. When U.S. Senator Chuck Grassley, (R-IA) investigated pastors with private jets, Rolls Royce cars, multimillion-dollar homes, trips to Hawaii and Fiji and similar lavish indulgences, nothing happened. The preachers ignored him and there were no consequences. (Source: Pro/Con – Should Churches Remain Tax-Exempt?)

What’s a Secular Wellness Promoter To Do?

The Supreme Court has fielded challenges to most if not all of the subsidizes lamented in this essay and, lamentably, said in so many words, Oh well, we do love our cults and superstitions, don’t you know? Yeah, it’s constitutional enough, for our tastes.

Whether you are affiliated with a religion or not, if you care about a healthy, fair and rational society, you might want to think of doing what little you can to support candidates for public office who recognize the problem with massive religious subsidizes. Start with your vote on November 8.

On that topic, let me recall what John F. Kennedy said to an audience of Protestant clergy in Houston, Texas in 1960:

I believe in an America where the separation of church and state is absolute; where no Catholic prelate would tell the President — should he be Catholic — how to act, and no Protestant minister would tell his parishioners for whom to vote; where no church or church school is granted any public funds or political preference, and where no man is denied public office merely because his religion differs from the President who might appoint him, or the people who might elect him.

I believe in an America that is officially neither Catholic, Protestant nor Jewish; where no public official either requests or accept instructions on public policy from the Pope, the National Council of Churches or any other ecclesiastical source; where no religious body seeks to impose its will directly or indirectly upon the general populace or the public acts of its officials, and where religious liberty is so indivisible that an act against one church is treated as an act against all.

Sad to say, the present Democratic candidate for president, Hillary Clinton, is no Jack Kennedy, any more than was Dan Quayle. (Millennials unfamiliar with this forgettable candidate might want to Google the video of the VP debate when Mr. Quayle compared himself to JFK.

Back to Hillary: At the 136th annual National Baptist Convention on September 8, the good woman passed around large slices of Pander Pie in assuring the Baptists that, we need a president who understands the powerful role that faith-and communities of faith-have always played in moving our country toward justice… A president who will pray with you, and for you… a president who will do justice, love kindness and walk humbly with our God.

Oy vey!

Well, at least she didn’t promise more tax subsidies (e.g., free college tuition if you take a pledge attesting that you truly love the Lord.)

Even if she said that, I’d still vote for her because Trump is worse beyond belief on every imaginable issue. (In fact, I fear if he reads this AWR, he might adopt the facetious idea I offered as a jejune example in the preceding paragraph.)

If all else fails and this bloviator gets elected, I’m going to act on a rumor I just started that Australia has a quota for very old people into REAL wellness who favor no taxpayer subsidies for religions.

All the best. Good wishes, be well and consider putting the elimination of subsidies for religions on your bucket list.

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Is Gentrification The New Manifest Destiny?!

Manifest Destiny, What is it? Manifest Destiny was the 19th-century belief of the colonists that the expansion of the US throughout the American continents was both justified and inevitable. Colonists believed that it was God’s ordained wish that all of North America from ocean to ocean, including Mexico and Canada, soon belong to them. This was used as justification for US Domestic Policy towards the Natives while moving west. It was used as justification for violently seizing control of California and Texas from Mexico. It was also used as justification for invading and attacking Canada after 1812, which many Americans were never taught about. It would seem a tad bit harsh to compare this to gentrification.

Many see gentrification as the revitalization of poor inner city areas into thriving middle class urban communities. However, when it’s examined with a closer lens one can see that gentrification and revitalization are not quite the same. Gentrification comes with a price. Gentrification is the process in which high income investors buy into low income urban neighborhoods in an attempt to capitalize on low property values. This process results in an inflation of property values which displaces the low income inhabitants who all in entirety can no longer afford to live there. It also displaces the culture and character that bonded the community together. Displacing the people and erasing the culture of entire communities is the price of gentrification.

It would be a mistake to look at gentrification as a racial issue. Those who mention gentrification as the reversal of 20th century “White flight” do not quite have a complete understanding of the issue. However, due to fact that the low-income urban neighborhoods being gentrified are most often filled with Black and/or Hispanic inhabitants and replaced with middle class White inhabitants, race does make its way into the issue. Race removal is a result of gentrification but not a cause or reason for its initiation. Racism is not a heavy factor when it comes to the issue. Blacks are often on the opposition of gentrification for the reason that their neighborhoods & cultures are being erased and dispersed through it. Neighborhoods like Harlem, Washington D.C, Brooklyn, and Atlanta are losing their Black population as we speak. As well as so many other inner cities.

I’m an Atlanta native myself and I can recall around 2008 when the city forced thousands of Black families to move out without providing an alternative option for low income housing. They were simply kicked out and told to find somewhere else to live. Housing projects like Bowen Homes, Bankhead Courts, etc. were emptied and bulldozed down to the ground. Their plan was to turn the ghetto of Atlanta, Bankhead (a long highway in which these housing projects were located), into a middle class neighborhood by the near future. The city even changed the street name from Bankhead Hwy to Donald Lee Hollowell Pkwy to make it unrecognizable to those who knew it as their home. Instead of building up poor communities for the less fortunate who live there public and private investors are building neighborhoods up and forcing the poor who live there to find another home somewhere far away.

How does this change the culture of Atlanta? Simple, Atlanta for the last 20 years has been known as the “Black mecca” of America, much like Harlem was known during the Harlem Renaissance of culture. Atlanta has also been known as the international headquarters of this new music called Rap and Hip Hop, also much like Harlem with Jazz during the Harlem Renaissance. With the current gentrification trends it’s sad to say that this will not be the case 10 years from now. Atlanta’s Black population in 2000 was 61.4% and dropped all the way down to 54.0% by 2010 and is still dropping. In 2009, Atlanta was 714 votes short of electing its first non-black mayor since 1974. Intown Atlanta neighborhoods are being gentrified, such as East Atlanta and the Old Fourth Ward, ghettos are replaced with upscale homes. Whites are moving into these upscale homes & this causes a movement of blacks into rural cities and adjacent suburbs. Atlanta’s Black hip hop culture will be unrecognizable maybe even non-existent in the coming future.

What’s even more devastating than losing a culture is the disinvestment that is soon to come as a result of gentrification. We can take a quick view at history and it will give us insight on our near and far future to come. In the mid-20th century Blacks began to move away from the south and into inner cities looking for jobs and better opportunities at the American dream. This was the cause of “White flight” which was a migration of Whites out of racially mixed urban areas. As a result, disinvestment began in the racially mixed inner city communities. This was the time, as Spike Lee says, where the trash wasn’t picked up every day and the police didn’t make sure the communities were protected. Now, through gentrification these neighborhoods are being reinvested in and they are protected and have daily trash pickups but the poor no longer live there. The poor now are either homeless or are being moved to suburbs and back to the south. As a result of such focus on inner city communities suburban and rural areas are being dis-invested in and this will be the trend for decades to come. The suburbs will now become the ghettos with high crime and poor schools who get no investment from public or private sectors. The same maltreatment of the poor continues simply in a new location. It’s important to understand this. Gentrification is doing no good for the low income inner city families it claims to be helping.

What about the few households who don’t rent, the urban homeowners? Does not the property value increase benefit them? Before investors can rebuild a neighborhood there has to be a plan in place years ahead of time. These years before the matter is usually the time investors spend buying out the property in planned area. The majority of the property owned by the natives of the area is bought out before the gentrification even begins. The stubborn last minority are the ones aware of the property value increase soon to come. However, what also comes with the higher property values is higher prices on everything else. Gas, clothes, groceries, property tax, bills, even daily lunch becomes more expensive while income stays the same. They find themselves in a situation where they can no longer afford to live in the area and the property is sold before the full potential of the property value increase is met. Not even the minority of inner city homeowners benefit from gentrification.

What does all of this mean and how does it tie in with manifest destiny? As I stated before gentrification is not a racial issue although it may seem that way to many in America. It’s more of a western ideology problem. Gentrification is happening all across western civilization. San Francisco, East London, Berlin, Soho, Barcelona, Rio, Portland are just a few other cities to name. Many call this problem an effect of the “Columbus syndrome”. When you so-called discover something that the natives there already knew about you have Columbus syndrome. Symptoms of the Columbus syndrome are infiltrating the land in which the natives live because it interests you, forcing them out, making it your new home, taking things from their culture and calling it your own. If you experience any of these symptoms call your doctor. In all seriousness, it sounds a lot like what happened to the Natives of our country. At the same time, it sounds a lot like what’s happening via gentrification. Manifest destiny was the coherently evil and violent removal of inhabitants of newly found land. Gentrification is the incoherent economic removal of inhabitants of reinvested land. In this way the two don’t compare but the similarities are striking. I’ll leave you with this question. Do the benefits of gentrification outweigh the consequences? If not, let us fight to regulate the gentrification process.

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Hillary Clinton Has A 64-Page Economic Plan – Communist Manifesto PDF Only 62 Pages

The other day I was at a library bookstore and found a copy of the Communist Manifesto, it was a pocket-sized little red book and 94-pages. I thought to myself how far our nation has come towards those scary ideals over the past few decades. Communism is about the most intense scheme against the individual – liberties and freedoms – that anyone could possibly dream up. To those living under it, somehow it makes sense to them, of course their lens of perception is often skewed by a lifetime and generations of indoctrination. Anyway, I took my little red-book to Starbucks and read through it, much of it I had remembered from school years the prior.

When I went home, I decided to write an article about the differences between Communism and Free-Market Capitalism and why in the US we’ve done so well with our approach to civilization and society. I went online to gather up a few quotes that I could cite for this article and downloaded a 62-page version of the Communist Manifesto. About that time, I was tuning into the Clinton News Network or CNN, and there was Hillary Clinton bragging about her 64-page Economic Plan if elected. Mostly it is regurgitated 2008 Obama Campaign plans, much of which the Obama Administration attempted to put into practice with his windfall of TARP Funds and use of his newly gained political capital back in 2009.

Some call the Obama Administration a Tax and Spend regime, but really if one is fair to the reality – it is more like a Spend, Spend, Spend, Borrow, and Tax plan – Hillary’s Economic Plan, essentially the same – the same old Leftists talking points, vote buying socialist strategy and a little communist manifesto mixed in to show ones’ true colors. I find it interesting that Hillary claims Donald Trump is in bed with Putin, when her leftist views are much more in-line with Big Government Communist Motif.

While it is true that Hillary Clinton does have a 64-page economic plan on her website – I say, “So What? The Communist Manifesto is online with 62-pages in a PDF download,” and would suggest that you read it because the similarities are strikingly scary to anyone with half the cranial capacity needed to walk and talk. If you’d like to live in a society of “equals” where everyone is equally poor, and the government controls all aspects of your life, wealth, career, death and itself owns all the property – then by all means vote for Hillary Clinton – if not, Trump should be your choice in 2016.

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The Real Threat to the Economy

When I was in university, my fellow economics students were a rowdy bunch. Most were business science majors who had to take Econ 101 and 202 for the degree. Unlike a few others and me, they saw studying economics as a burden rather than enlightenment.

On one particularly raucous morning – the university rugby team had probably beat our archrivals over the weekend – the lecturer was covering the role of banks in the economy. He recited the old trope about recycling household savings into productive investment via lending. But his heart obviously wasn’t in it.

One of my fellow economics majors, who tended to congregate in the middle row, raised his hand. “Professor, I read an article of yours where you argued that what you just said was too simplistic and concealed the inherent dangers of the banking system. Why don’t you teach us that?”

My professor paused, a little ironic smirk on his face. “Because they won’t let me,” he said.

When it comes to the real and terrifying role of modern banking and debt, “they” still won’t.

You Can’t Eat It, Folks

Right next to the Department of Economics at my university was the Department of Political Studies. (Unlike American universities, South African universities rejected the notion that it could be a “science.”) Paradoxically, it was in its seminar rooms where I was introduced to the works of “forbidden” economists… like Karl Marx.

Marx gets a bad rap, partly because of his ideas and partly because of what was done in his name during the 20th century. But some of those ideas are quite useful as long as you can put them in proper context.

One of those ideas is the “money fetish.” In anthology, a fetish is an inanimate object worshiped by primitive peoples for its supposed magical powers. Marx argues that in our modern economy, people treat money as if it has magical powers of its own – intrinsic value – even though it is just a claim on real goods and services. This obscures the fact that money is just a socially constructed convention that mediates what really counts in life – real people producing real things of useful value.

If there aren’t any real things to buy, money is worthless.

Show Me the Money

To me, this is the ideal way to understand the modern global economy.

The International Monetary Fund recently warned that global debt has hit an all-time high of $152 trillion. That’s nearly twice the size of the global production of actual goods and services. The world’s debtors will need to produce real economic value – goods and services people want and can afford to buy – of twice the size of the world’s output to pay off all their debts… before they can even start accumulating wealth of their own.

The funny thing is, though, that the world’s biggest financial institutions continually create new money out of thin air by trading and speculating on this global pile of debt. Every dollar of that $152 trillion is an asset to a creditor who can use it to generate paper “profits.” Our best and brightest brains are devoted to conjuring ever more complex derivatives and other devices to make paper money from other paper money… all without creating anything humans can actually eat, wear or otherwise use.

The Economy: Something’s Gotta Give

The creditors who are owed the world’s debt – the world’s top bankers – are among the richest people on the planet… the top 0.01%. Most of that wealth is in the form of shares of the financial institutions they run. The market capitalization of those institutions is in turn determined by how well the bankers play the game of money creation. The more money they can conjure by speculating on other people’s debt, the bigger the bankers’ fortunes.

At least on paper, that is. Imagine, if you will, that those bankers decided actually to use the “wealth” they claim to have by buying goods and services with it. They’d quickly discover that the planet doesn’t have enough of what they’d probably want to buy. If they tried to buy it anyway, prices would skyrocket, devaluing their wealth through inflation.

That’s why mega banks are addicted to speculating on the world’s debt pile. There’s nothing else to do with their “money.” Real people can’t afford to buy goods and services. Real companies don’t want to borrow money to invest because there aren’t enough potential customers with money to buy their output. So those companies borrow money from banks to repurchase their own shares, artificially inflating their value… again, without creating anything tangible anybody can actually use.

And that’s what’s behind the current stock market bubble… nothing more than fetish – value without substance.

Pop Goes the Weasel

We tend to focus on government debt because it’s politically expedient that we do so. It keeps us asking the wrong questions of the wrong people.

I’m convinced that the true threat to the world’s economy – and to your own wealth – is the self-reproducing pile of global private debt that’s unconnected to real, tangible goods and services. Sooner or later, everyone is going to recognize that this debt has no actual value because there’s nothing it can make or buy in the real world.

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