Stratfor: “It is hard to see anything that will help Europe recover its vibrancy.”

Europe’s Malaise: The New Normal? is republished with permission of Stratfor.” Geopolitical Weekly / Tuesday, August 19, 2014                                                  Excerpts:

“[T]he German economy contracted by 0.2 percent last quarter. Though many will dismiss this contraction outright, the fact that the world’s fourth-largest economy (and Europe’s largest) has shrunk, even by this small amount, is a matter of global significance.

Europe has been mired in an economic crisis for half a decade now. Germany is the economic engine of Europe, and it is expected that it will at some point pull Europe out of its crisis. There have been constant predictions that Europe may finally be turning an economic corner, but if Germany’s economy is contracting (Berlin claims it will rebound this year), it is difficult to believe that any corner is being turned. It is becoming increasingly reasonable to believe that rather than an interlude in European prosperity, what we now see is actually the new normal. The key point is not that Germany’s economy has contracted by a trivial amount. The point is that it has come time to raise the possibility that it could be a very long time before Europe returns to its pre-2008 prosperity and to consider what this means.

Faltering Europe
The German economy contracted despite indications that there would be zero economic growth. But the rest of Europe is faltering, too. France had zero growth. Italy declined by 0.2 percent. The only large European economy that grew was the United Kingdom…. Excluding Ireland, which grew at a now-robust rate of 2.5 percent, no EU economy grew more than 1 percent. Together, the European Union scarcely grew at all.

…Europe is fairly stagnant, the unemployment situation is truly disturbing. Spain and Greece both have around 25 percent unemployment, the level the United States reached during the Great Depression. While that’s stunning, 15 of the 28 EU members have unemployment rates of more than 10 percent; most have maintained that high rate now for several years. More alarming, these rates are not falling.

…. Europe as a whole is not growing at all, and unemployment is high.
Five to six years after the global financial crisis, persistent and widespread numbers like this can no longer be considered cyclical, particularly because Germany is running out of gas. …..One of the things that should concern Germans is the banking system. It has been the obsession of the European financial elite, at the cost of massive unemployment, and there is the belief, validated by stress tests, that the financial system is sound.

For me, there has been an ongoing mystery about Europe: How could it have such high unemployment rates and not suffer a consumer debt crisis? The climbing rate of unemployment should be hitting banks with defaulted mortgages and unpaid credit card debt. Given the fragility of the European financial system in the past, it seems reasonable that there would be heavy pressure caused by consumer debt.

The known nonperforming debt situation is sufficiently concerning. Four countries have nonperforming loan rates surpassing 20 percent. Six have rates between 10 and 20 percent, including Italy’s, which stands at 15.1 percent. The overall EU rate is 7.3 percent. Obviously, the situation in Italy is the most dangerous, but there is the question of whether these numbers capture the entire problem. Spain, with 24 percent unemployment, is reporting only an 8.2 percent nonperforming loan rate. Portugal, with lower unemployment rates, has an 11 percent nonperforming loan rate. France (with more than 10 percent unemployment) is reporting only a 4.3 percent nonperforming loan rate.

The devil is in the details, and there may be an explanation for these anomalies. But the definition for a nonperforming loan has been flexible in Europe and other places before, and the simple question remains: How can such long-term high unemployment rates not produce significant problems in consumer debt?

It is simply unclear how Europe untangles this Gordian knot. Considering the length of Europe’s economic malaise, a strong argument would be required to say this is a passing phase. Given Europe’s unemployment, Germany’s need to export to the rest of Europe, and persistent weak growth rates now spreading to Germany, it is simply not obvious what force will reverse this process. Inertia is pointing to a continuation of the current pattern. It is hard to see anything that will help Europe recover its vibrancy.”
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Europe needs a plan will deliver real benefits to Europe’s people by rebuilding financial health starting at ground level.  They need a plan that is non-political, that balances national budgets, and unleashes the dynamic power of economic liberty for the people.

Europe needs a plan that will lift them out of their economic doldrums.

The Leviticus 25 Plan 2015 – The $70,000 solution                                        September 2014 – Updated versionThe Leviticus 25 Plan 2015 (537)

 

Guggenheim Partners, LLC – #26 recipient of Fed’s “secret liquidity lifelines”

Guggenheim Partners, LLC provides various forms of investment and financial services across the U.S., Europe and Asia.

Guggenheim ‘tapped’ some serious liquidity from the Federal Reserve during the height of the financial crisis.

Excerpts from: Bloomberg Nov 28, 2011:                                                                        As chief executive officer of Bear Stearns Cos. in 2008, Alan Schwartz tapped the Federal Reserve for as much as $30 billion of emergency cash to float the New York-based brokerage until it could be acquired by JPMorgan Chase & Co.

By June 2009, he was CEO of closely held Guggenheim Partners LLC, whose special purpose financing affiliates borrowed as much as $16.4 billion from the Fed’s Commercial Paper Funding Facility. Liberty Hampshire Co., a Guggenheim unit, sponsored asset-backed commercial paper conduits, which removed mortgage securities and other assets from companies’ balance sheets and provided cheap financing. Such conduits were among “shadow banks” that helped inflate pre-crisis asset bubbles, according to a July 2010 Federal Reserve Bank of New York report.
Peak Amount of Debt on 12/10/2008: $16.4B
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Guggenheim Partners, LLC received their Fed liquidity transfusions through Commercial Paper Funding Facility, one of the many credit facilities created by the Fed to rescue companies that had rolled the dice with leveraged speculation – and lost.

These Fed’s liquidity transfusions come with a price. They represent a ‘draw’ on the purchasing power of the future earnings of millions of U.S. citizens.

U.S. citizens should receive nothing less than equal access to liquidity, through a Citizens’ Credit Facility, from the Fed.

The Leviticus 25 Plan 2015 – The $70,000 Solution                                                   September 2014 – Updated versionThe Leviticus 25 Plan 2015 (540)

 

Bank for International Settlements (BIS) warnings…

The Bank for International Settlements (BIS) is an international organization that coordinates monetary activities among its 60 member Central Banks. The BIS is based in Basel Switzerland, with offices also in Mexico City and Hong Kong.

The BIS warned back in June 2014. about serious shortcomings emerging from Central Bank stimulus activities:
“… it is hard to avoid the sense of a puzzling disconnect between the markets’ buoyancy and underlying economic developments globally…. Despite the euphoria in financial markets, investment remains weak. Instead of adding to productive capacity, large firms prefer to buy back shares or engage in mergers and acquisitions.

The BIS had earlier warned (June 2013):                                                                       Six years have passed since the eruption of the global financial crisis, yet robust, self-sustaining, well balanced growth still eludes the global economy. If there were an easy path to that goal, we would have found it by now.

Monetary stimulus alone cannot provide the answer because the roots of the problem are not monetary. Hence, central banks must manage a return to their stabilisation role, allowing others to do the hard but essential work of adjustment.

Overindebtedness is one of the major barriers on the path to growth after a financial crisis….
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Real economic growth and development begins with financial stabilization at ground level.

Key aspects of this include a vigorous reduction of “indebtedness” at the family level, the elimination of destructive social welfare program disincentives for work, and restoring the dynamic power of free market economics.

There is one plan that delivers on all fronts:
The Leviticus 25 Plan 2015 – The $70,000 Solution                                       September 2014 – Updated version: The Leviticus 25 Plan 2015 (539)

 

The national debt – and the only plan that can “dig America out”

The national debt of the United States remains an enormous, potentially destabilizing problem for the future of our country, and America must have a plan to address it – a plan that will stimulate the economy and generate healthy, long-term tax revenue growth – and reduce dependency on government.

America’s true, GAAP-based sovereign debt has been reported in the U.S. Treasury Statement of Social Insurance in the Financial Report since 2005. The GAAP-based debt, which accounts for the net present value of unfunded liabilities, was recently estimated at $86.6 trillion. This represents 550% of the U.S. GDP, and it represents 150% of the global GDP. The U.S. sovereign debt is clearly “beyond containment.” There is no possible way of bringing it back under control.

The GAAP-based deficit over the past 5 years (2008 – 2012) has averaged more than $5 trillion per year (with the 2012 deficit coming in at $6.9 trillion). At these levels, the Government could take all of the income earned by everyone in America, and it still wouldn’t cover the deficit. America’s sovereign debt is now clearly “beyond containment.”

America has its back to the wall. The Federal Reserve, over the long term, is faced with a ‘print or collapse’ scenario. With their goal of maintaining an “interest rate cap,” the Fed will need to continue on with Permanent Open Market Operations (POMOs) and other forms of liquidity support for Treasury Auctions.

Risk is rising for an on-going, long-term Dollar debasement – one that would be potentially devastating to the financial health of millions of American families and destabilizing to America’s economic system. The clock is ticking. America needs a new plan and a new beginning.

The Leviticus 25 Plan – rebuilding America ‘s economic foundation from the ground up.

Stratfor: Europe “faltering”

 
The Stratfor report below illustrates some of the economic witching winds that are blowing across Europe.  Major economies of Europe are barely trudging along… high unemployment… non-performing bank loan problems…
 
Europe needs a new plan…
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Stratfor, August 29, 2014
Excerpts:
Faltering Europe
The German economy contracted despite indications that there would be zero economic growth. But the rest of Europe is faltering, too. France had zero growth. Italy declined by 0.2 percent. The only large European economy that grew was the United Kingdom, the country most skeptical of the value of EU membership.
                                                                                                                   
Excluding Ireland, which grew at a now-robust rate of 2.5 percent, no EU economy grew more than 1 percent. Together, the European Union scarcely grew at all.
Obviously, growth rate is not the full measure of an economy, and statistics don’t always paint the full picture. Growth doesn’t measure social reality, and therefore it is important to look at unemployment. And though Europe is fairly stagnant, the unemployment situation is truly disturbing. Spain and Greece both have around 25 percent unemployment, the level the United States reached during the Great Depression. While that’s stunning, 15 of the 28 EU members have unemployment rates of more than 10 percent; most have maintained that high rate now for several years. More alarming, these rates are not falling.
                                                                                                                            
Half of all EU residents live in four countries: Germany, France, the United Kingdom and Italy. The average growth rate for these countries is about 1.25 percent. Excluding the United Kingdom, their economies contracted by 0.1 percent. The unemployment rate in the four countries averages 8.5 percent. But if we drop the United Kingdom, the average is 9.2 percent. Removing Britain from the equation is not arbitrary: It is the only one of the four that is not part of the eurozone, and it is the country most likely to drop out of the European Union. The others aren’t going anywhere. Perhaps the United Kingdom isn’t either, but that remains to be seen. Germany, France and Italy, by population if nothing else, are the core of the European Union. They are not growing, and unemployment is high. Therefore, Europe as a whole is not growing at all, and unemployment is high.
                                                                                                                            
Five to six years after the global financial crisis, persistent and widespread numbers like this can no longer be considered cyclical, particularly because Germany is running out of gas. It is interesting to consider how Germany has arrived at this point. Exports continue to grow, including exports to the rest of Europe. (That is one reason it has been so difficult for the rest of Europe to recover: Having lost the ability to control access to their markets, other European countries are unable to compete with German exports. It may be free trade, it may even be fair trade, but it is also a trade pattern that fixes failure in place.)
                                                                                                               
Employment remains strong. The German financial system is viable. Yet consumer and corporate confidence is declining. As we look at the situation Germany is facing, confidence should be decreasing. And that in turn becomes a self-fulfilling prophecy: German employment has been supported by exports, but there is a limited appetite for Germany’s exports amid Europe’s long-term weakness and a world doing better but still not well enough to float the German economy.
                                                                                                                            
One of the things that should concern Germans is the banking system. It has been the obsession of the European financial elite, at the cost of massive unemployment, and there is the belief, validated by stress tests, that the financial system is sound. For me, there has been an ongoing mystery about Europe: How could it have such high unemployment rates and not suffer a consumer debt crisis? The climbing rate of unemployment should be hitting banks with defaulted mortgages and unpaid credit card debt. Given the fragility of the European financial system in the past, it seems reasonable that there would be heavy pressure caused by consumer debt.
                                                                                                                             
The known nonperforming debt situation is sufficiently concerning. Four countries have nonperforming loan rates surpassing 20 percent. Six have rates between 10 and 20 percent, including Italy’s, which stands at 15.1 percent. The overall EU rate is 7.3 percent. Obviously, the situation in Italy is the most dangerous, but there is the question of whether these numbers capture the entire problem. Spain, with 24 percent unemployment, is reporting only an 8.2 percent nonperforming loan rate. Portugal, with lower unemployment rates, has an 11 percent nonperforming loan rate. France (with more than 10 percent unemployment) is reporting only a 4.3 percent nonperforming loan rate. The devil is in the details, and there may be an explanation for these anomalies. But the definition for a nonperforming loan has been flexible in Europe and other places before, and the simple question remains: How can such long-term high unemployment rates not produce significant problems in consumer debt?
                                                                                                                                 
It is simply unclear how Europe untangles this Gordian knot. Considering the length of Europe’s economic malaise, a strong argument would be required to say this is a passing phase. Given Europe’s unemployment, Germany’s need to export to the rest of Europe, and persistent weak growth rates now spreading to Germany, it is simply not obvious what force will reverse this process. Inertia is pointing to a continuation of the current pattern. It is hard to see anything that will help Europe recover its vibrancy.
Europe's Malaise: The New Normal? is republished with permission of Stratfor.”

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The Leviticus 25 Plan is a dynamic new economic plan that would re-energize Europe at ‘ground level’  by freeing individual citizens and national economies from many of the government-induced entanglements that bog systems down.
 
Europe does not need Goldman Sachs and Blackstone swooping in to buy up distressed properties (Portugal) and serve as Europe’s new landlord.
 
Europeans need economic liberty and a fresh start.
 
The Leviticus 25 Plan.

“He who will not apply new remedies must expect new evils.” – Sir Francis Bacon

The Leviticus 25 Plan has undergone a comprehensive update.

September 2014 – Overview:
The Leviticus 25 Plan is a novel economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens. It is a comprehensive plan with long-term economic and social benefits for citizens and government. The inspiration for this plan is based upon the Biblical principle set forth in the Book of Leviticus, tendering direct economic liberties to the people.

The legitimacy of The Leviticus 25 Plan is derived from five foundational concepts:
1. The Biblical precedent set forth in the Book of Leviticus, Chapter 25, directs a periodic restoration of economic liberty at the family level.
2. Liquidity must be restored at the family level, in order to restore genuine economic growth.
3. The true U.S. fiscal deficit, on a Net Present Value (NPV) basis, is beyond containment.
4. American families should be granted the same opportunities for “zero interest rate” credit extensions from the Federal Reserve, or the Department of Treasury, that have been made available to major U.S. financial institutions and foreign banks.
5. Federal Reserve debt balance sheet expansion, when and where deemed necessary for the U.S. financial system, must include a mechanism for direct liquidity flows to U.S. citizens – thereby allowing for an equal balance of debt reduction and financial stabilization at the family level.

Benefits – The Leviticus 25 Plan will:                                                                     Provide direct liquidity infusions to American families.

Optimize the allocation of health-care services and spending (including Medicare and Medicaid).

Improve the economic climate for U.S. small businesses.

Improve employment opportunities for all Americans.

Generate a long-term, healthy stream of tax revenue for government (federal, state, local).

Reduce the cost of government, strengthen U.S. housing market, and stabilize the banking system.

Reduce the scope of social programs and their control over U.S. citizens.

The Leviticus 25 Plan will revitalize economic growth and advance the cause of positive economic and social incentives for all Americans.

Council on Foreign Relations: “Print Less but Transfer More – Why Central Banks Should Give Money Directly to the People”

The Council on Foreigh Relations, founded in 1921, is a non-profit American organization, populated with senior government figures and politicians, bankers, lawyers, intelligence officers, and other from the elite class.  With offices in New York and Washington, D.C., it is viewed as the nation’s “most influential foreign-policy think tank.”

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Seeking Alpha / Sep 2, 2014  5:55 AM ET – Excerpts

When an article appears in Foreign Affairs, the mouthpiece of the policy-setting Council on Foreign Relations, recommending that the Federal Reserve do a money drop directly on the 99%, you know the central bank must be down to its last bullet.

The September/October issue of Foreign Affairs features an article by Mark Blyth and Eric Lonergan titled “Print Less But Transfer More: Why Central Banks Should Give Money Directly To The People.” It’s the sort of thing normally heard only from money reformers and Social Credit enthusiasts far from the mainstream. What’s going on?

The Fed, it seems, has finally run out of other ammo. It has to taper its quantitative easing program, which is eating up the Treasuries and mortgage-backed securities needed as collateral for the repo market that is the engine of the bankers’ shell game. The Fed’s Zero Interest Rate Policy (ZIRP) has also done serious collateral damage. The banks that get the money just put it in interest-bearing Federal Reserve accounts or buy foreign debt or speculate with it; and the profits go back to the 1%, who park it offshore to avoid taxes. Worse, any increase in the money supply from increased borrowing increases the overall debt burden and compounding finance costs, which are already a major constraint on economic growth.

Meanwhile, the economy continues to teeter on the edge of deflation….

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The Council on Foreign Relations (CFR) is marginally on the right track.  But their proposal does nothing to restore economic liberty in America, and it does nothing to free people from the heavy hand of government in controlling and restricting them in managing their daily affairs.

The Leviticus 25 Plan does restore economic liberty in America, and it frees people from oppressive government programs that actually keep them in poverty and servitude.

The Leviticus 25 Plan would effect wide-scale debt elimination at the family level, thereby helping to insulate millions of Americans from potentially devastating effects of another severe economic contraction.

The Plan would eliminate massive government restrictions and control over healthcare, and replace it with individual control  and consumer choice in healthcare access.

The Leviticus 25 Plan would balance the federal budget – immediately in Year One.

 

 

The Leviticus 25 Plan – Update, September 11, 2014

The new Leviticus 25 Plan is now up.

The Plan has been stream-lined, corrected, inflation-adjusted, and updated with new references.

The new liquidity benefit: $70,000 per U.S. citizen (Family Account: $50,000 and Medical Savings Account: $20,000)

The Recapture Provisions alone will generate government savings of $8.379 trillion over the first 5 years, or $1.67 trillion per year.

With near term government deficits projected at $500 – $600 billion per year, The Leviticus 25 Plan will generate $1.1 trillion budget surpluses each year for the next 5 years – surpluses to be transferred back to the Federal Reserve to shrink the Citizens Credit Facility balance sheet back down over time.

The Leviticus 25 Plan 2015  –  The $70,000 Solution

Updated version: The Leviticus 25 Plan 2015 (500)

 

“Welfare Nation” – primed with disincentives and fraud…

110 million Americans are currently receiving some form of government assistance. That’s one out of every three people in the U.S.

FoxNews.com – August 29, 2014:
Though the programs were created to help those in need, some analysts worry that the way they’re designed is, increasingly, incentivizing people not to work. They note that when recipients combine several government assistance programs, in many cases they pay better than going to work.

The Cato Institute’s Michael Tanner said that in the eight most generous states, the benefits can be tantamount to a $20 minimum wage – which would exceed the $7.25 minimum wage in most states.

“So in many cases people could actually do better on welfare than they could in an entry level job,” Tanner said.

This is an unhealthy social dynamic for America, and it is unsustainable.
Instead of perpetuating the growing dependence on government, America needs a plan to provide families with the resources to free themselves from this legacy of ‘serfdom.’
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There are currently some 46-47 million Americans on food stamps, and a recent GAO study found that “fraud is rampant.”

FoxNews.com – August 22, 2014:
Americans receiving food stamps were caught selling and bartering their benefits online for art, housing and cash, according to a new federal report that investigates fraud in the nation’s largest nutrition support program.
Complicating the situation is the fact states around the country are having trouble tracking and prosecuting the crimes because their enforcement budgets have been slashed despite the rapidly-rising number of food stamp recipients, according to the Government Accountability Office report.
Under the Supplemental Nutrition Assistance Program, or SNAP, 47 million people have been awarded $76 billion in benefits. State agencies are responsible for addressing SNAP recipient fraud under the guidance and monitoring of the Food and Nutrition Service.

“Such rapid program growth can increase the potential for fraud unless appropriate agency controls are in place to help minimize these risks,” the investigators said in their report.

The GAO report resulted from a review of 11 state and federal efforts to fight food stamp fraud, effectiveness of certain fraud detection tools and how FNS oversees state anti-fraud efforts.

The report found that most of the selected states reported difficulties in conducting fraud investigations due to either reduced or maintained staff levels while SNAP recipient numbers greatly increased from fiscal year 2009 through 2013.”
Full report: Food stamp fraud rampant, GAO report finds

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America’s social welfare programs are perpetuating a multi-generational dependency on government. The programs are difficult to monitor and costly to control. They are bogging the country down.

It is time for change.

The Leviticus 25 Plan.