Global Economics: The Truth and a Warning

Source Video: World United News

https://www.youtube.com/watch?v=HHTpRDM96YQ

By: Stewart Brennan
http://worldunitednews.blogspot.com/

 

Every country will face a “Tipping Point” and breakdown of society in the near future due to the crushing economic austerity measures inflicted on the people by the brutal International Banking System that was conceived and designed to acquire wealth and power for an elite few.

When impoverished nations reach their economic tipping point, the governing power structure of those nations will have no options left. They will have to tell those in control of their economic system to bow down to major changes, or they themselves will face the consequences of their inaction.

At the moment, the choice to fix the broken system belongs to those in control of it. I.e.: The International Banking Cartel through the IMF, World Bank, and International Bank of Settlements…however, if the warning is ignored and the choices made by those who govern the system only ensure that the extremely wealthy survive these harsh economic times, then the responsibility to correct the economic disparity will shift to the impoverished masses by virtue of their will to survive.

Be assured that “Civil Unrest” will grow proportionally to the rise in poverty. All one needs for proof is catch a glimpse of what is unfolding in Egypt, Greece, or Spain to see the truth of these words…and there are many other nations at different stages of bankruptcy, poverty and austerity that is being forced upon them by the I.M.F (International Monetary Fund). The victims of the economic system will rise up in their millions because their very survival depends on a just system for all. 

However, the problem is not just that the IMF has taken control of every nations economic sovereignty but that the corporate power structure that comes with the Private banks has also taken control of the natural resources of most countries. 

Making matters worse for the people of the World is that the entire political system in every country, with few exceptions, has been seized at every level by the same corrupt banking system.

Even the opinions on mainstream news are bought and paid for by corporate interests. Don’t believe me? Well Just try to get a differing opinion aired to the public on these mediums and you’ll soon see that it becomes painfully obvious where these news corps feed, because you Will be denied your opinion, just as investigative journalism has been denied when it contradicts the banking or corporate plans of the extremely wealthy that control the mainstream press.

Personally, I no longer watch TV, read newspapers or listen to the radio airwaves anymore because they are arrogantly biased and illogically opposed to common sense.

Call it what you will, but be assured that everyone will wake up to these facts sooner or later and when they do, there will be hell to pay…the degree will depend on how far the banking cartel try to take their illusion.

The Solution:

Nationalize all the private banks in each country to end the existence of “The IMF, World Bank, and the Bank of International Settlements”. Then each country must Nationalize all their natural resources so that the profits go into the nations coffers that supports the communities and the social programs. Reorganize the political structure so that real qualified people govern the nation. Money must not be allowed to affect the political structure ever again.

The World is yours to build, we do not need Private Banks to control it.

Stewart Brennan

World United News
http://worldunitednews.blogspot.com/

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Panama protests against free trade zone land sales (PHOTOS)

 

A police officer runs as a photographer lies on the street as police opened fire during a massive protest against a new government law, which allows for the sale of land in Panama's free trade zone of Colon, in Colon City October 19, 2012 (Reuters / Carlos Jasso)

Source: Russia Today

http://rt.com/news/panama-protests-trade-zone-843/

The Panamanian government’s decision to sell land in the free-trade zone at the Caribbean entrance to the Panama Canal has sparked violent protests. Clashes with police the streets of the sea-port of Colon reportedly left 15 people wounded.

According to Venezuelan state TV channel Venezolana de Televisión, there have been at least 25 protesters detained by police. Information about a 15-year-old person killed in clashes has found no confirmation.

Curfew has been enacted in Colon immediately after the clashes when protesters were burning tires to block the streets.

­Facts about Panama Canal:

Panama Canal was constructed between 1880 and 1914.

Between 1904 and 1913, a total of 56,307 persons were employed during the construction of the Panama Canal. Nearly 20,000 French and 6,000 American workers died during the completion of the Panama Canal.

The length of the Panama Canal is 80 kilometers (50 miles) from the deep waters of the Atlantic to the deep waters of the Pacific.

A ship takes an average of eight to 10 hours to transit the Panama Canal.

At the end of fiscal year 2011, 1,015,721 vessels had used the waterway since its opening on August 15, 1914.

Between 12,000 and 15,000 ships About 40 ships cross the Panama Canal every year.

The Canal transports 4 per cent of world trade

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Demonstrators in Colon believe the government’s decision to sell state-owned land in the Colon Free Zone (CFZ) will hit those who work in the free-trade zone and affect the income of many citizens of the country. The protesters insist the law is unconstitutional.

The head of the Colonense Broad Movement, Felipe Cabezas, told the AP news agency,"We do not want the land to be sold because these are assets that belong to Colon."

President Ricardo Martinelli said those instigating protests are protecting “small-minded interests” of their own and that sale of state-owned land will benefit the country.

The law supposes creation of a “social investments” trust that would manage 35 per cent of the revenues received from the sale of the land just outside the former Panama Canal Zone.

The larger, 65 per cent, share will go to the country’s central government.

he free trade port of Colon is one of the largest in the world. In operation for over half a century now, the port hosts over 2,000 companies doing business in the profitable free-trade zone.

In 1999, the United States passed control over the Panama Canal to the Panamanian state. Since then the waterway linking Atlantic and Pacific oceans is the principal source of the revenues for Panama.

It is expected that in 2014 the works on expansion of the waterway will be over just ahead of the Panama Canal’s centenary.

 

People take part in a massive protest against a new government law, which allows for the sale of land in Panama's free trade zone of Colon, in Colon City October 19, 2012 (Reuters / Carlos Jasso)

 

A family runs for shelter after tear gas was shot by riots police during a massive protest against a new government law, which allows for the sale of land in Panama's free trade zone of Colon, in Colon City October 19, 2012 (Reuters / Carlos Jasso)

 

A police officer positions his gun during a massive protest against a new government law, which allows for the sale of land in Panama's free trade zone of Colon, in Colon City October 19, 2012 (Reuters / Carlos Jasso)

 

A riot policeman fires tear gas during a massive protest against a new government law, which allows for the sale of land in Panama's free trade zone of Colon, in Colon City October 19, 2012 (Reuters / Carlos Jasso)

 

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World economy slides deeper into slump

 

By: Andre Damon

Source: Global Research

http://www.globalresearch.ca/world-economy-slides-deeper-into-slump/

A string of negative reports coinciding with the start of the fourth quarter has revealed a significant deterioration in the global economy, with world trade slowing, manufacturing contracting, and the number of unemployed workers in the euro zone hitting a record high.

Despite these disastrous figures, stock prices in Europe and the United States rose on Monday, fueled by new central bank injections of cash into the global financial system, an intensification of austerity measures against the working class and expectations of new bank bailouts.

Eurostat, the European Union statistics agency, reported Monday that the unemployment rate in the 17-member euro zone remained at record highs in August, while the ranks of the unemployed grew by 34,000, bringing the total of jobless workers to a new high of 18.2 million. The jobless rate was 11.4 percent, the same as in July. A year ago, the region’s jobless rate was 10.2 percent.

In the 27-nation European Union as a whole, 25.5 million people were out of a job in August. The EU unemployment rate was 10.5 percent.

The unemployment rates of Spain, Greece and Portugal, the countries hardest hit by the euro crisis, all rose. Spain’s unemployment rate reached 25.1 percent, that of Greece hit 24.4 percent, and Portugal’s rose to 15.9 percent.

The unemployment rate for Italy stayed at 10.7 percent and France’s remained at 10.6 percent. Last week, the French government said the number of unemployed had hit a new record of 3 million.

Youth unemployment in the euro zone likewise worsened, hitting 22.8 percent in August, up more than 2 percentage points from a year ago, according to the Eurostat report. In Spain, 52.9 percent of people under 25 were without work.

The jobs crisis in Europe is likely to get even worse. Markit Economics reported Monday that its euro zone purchasing managers’ index (PMI), a key measure of manufacturing output, was 46.1 in August. As a reading below 50 indicates contraction, the August report marked the fourteenth consecutive month of decline in the manufacturing sector.

PMI figures released last week for both Germany and France, the core countries of the euro zone, showed sustained contraction. France’s PMI showed one of the biggest one-month falls in the survey’s 14-year history.

Chris Williamson, chief economist at Markit, said that “manufacturers across the euro area suffered the worst quarter for three years in the three months to September. Output, order books and exports all continued to fall at steep rates … causing firms to cut their staffing levels once again.”

JPMorgan Chase’s global manufacturing purchasing managers’ index for September, at 48.9, remained below the 50 level.

The euro zone economy contracted by 0.2 percent in the second quarter of 2012, and economists have predicted that it will show a further decline for the third quarter. The New York Times quoted Jennifer McKeown, an economist with Capital Economics in London, as saying the euro zone economy would contract by 2.5 percent next year.

The economy of the entire European Union contracted by 0.1 percent in the second quarter.

The ongoing downturn in Europe continues to drag down the export-dependent Asian economies. China’s official manufacturing purchasing managers’ index was below 50 for a second consecutive month, coming in at 49.8 for September after a reading of 49.2 in August. The Chinese economy has already slowed for six consecutive quarters, and a seventh quarter of slowdown now looks likely.

Japan is in a similar state. The country’s central bank said Monday that the Tankan report, a measure of business confidence, fell to minus 3 in July from minus 1 in June. Japan’s manufacturing purchasing managers’ index reading of 48 likewise indicated contraction.

Last Friday, the Japanese government released figures showing that industrial production fell by 2.9 percent in September and 1.3 percent in August. Exports from South Korea, meanwhile, fell in September for the third consecutive month.

In the US, economic growth for the second quarter was revised downwards last week and a new report showed that durable goods orders had tumbled. The Commerce Department said Thursday that US gross domestic product grew by only 1.3 percent in the second quarter, a downward revision from its earlier estimate of 1.7 percent and significantly less than the 2.0 percent growth rate in the first quarter of the year. Orders for long-lasting manufactured goods (durable goods) fell by 13 percent in August, the largest fall since 2009.

The deepening global downturn is weighing heavily on international trade. The volume of global trade is expected to grow only 2.5 percent this year, down from a 5.0 percent in 2011 and 14.0 percent in 2010, according to a survey released Monday by the World Trade Organization. A separate report by an agency of the Dutch government estimates that world trade actually contracted in June and July.

Global stock markets responded to the dismal news by staging a rally. The German DAX rose by 1.53 percent and the British FTSE by 1.37 percent. The response of stocks in the US was more muted, but still positive, with the Dow rising 0.58 percent and the S&P 500 by 0.27 percent.

The ongoing rise of stock prices despite the marked deterioration of the real economy is a reflection of the immense attacks that are being carried out against workers in Europe, the United States and Asia, including job cuts, the slashing of wages, and austerity measures impacting social programs, pensions, health care and other benefits.

Banking and corporate profits are surging as a result of the lowering of working class living standards and intensification of the rate of exploitation of labor. At the same time, stocks and other speculative assets are being inflated by the injection of hundreds of billions of dollars into the financial markets by the central banks, particularly the US Federal Reserve, which announced last month a plan to inject $40 billion into the financial markets every month for an indefinite period.

These measures are being carried out by capitalist governments around the world, whether social democratic or conservative, to make the working population pay for the crisis of the world capitalist system.

 

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What is behind the global stock market rally?

 

By: Andre Damon

Source: Global Research

http://www.globalresearch.ca/what-is-behind-the-global-stock-market-rally/

Despite a string of disastrous economic figures, stock markets throughout the world are surging.

In the past year, the US Dow Jones Industrial Average and the British FTSE 250 have each risen by 20 percent, while the German DAX has shot up by 39 percent. The NASDAQ, consisting mainly of US-based technology companies, has already eclipsed its previous record, set in November 2007, while the Dow is within 600 points of its previous high.

The continued rise on stock exchanges comes as manufacturing activity in Europe, China and the United States slumps to its lowest level in three years. The European economy as a whole is contracting. In the latest raft of dire economic data, released Thursday, US durable goods orders recorded their sharpest fall since 2009. US economic growth for the second quarter was revised downward from an already anemic 1.7 percent to 1.3 percent.

How is one to explain the meteoric rise in stock values even as the global economy is sliding into a deeper slump?

The boom in stock prices is an expression of a global redistribution of wealth from the bottom to the top. The social conditions of the working class have been driven relentlessly downwards, while trillions of dollars have been turned over to the banks, mainly for the purpose of financial speculation.

This process is particularly evident in the United States, the center of world capitalism and the center of the global economic crisis.

The three major stock indexes have nearly doubled in value since 2009, and the fortunes of the super-rich have risen accordingly. The richest 400 billionaires in the US had a net worth of $1.27 trillion in 2009. This already obscene figure shot up to $1.7 trillion in this year’s list, an increase of 33 percent in just three years.

CEO pay has followed a similar course. The average CEO of one of the 350 largest US companies took home $12.14 million in 2011, up from $12.04 million in 2010 and $10.36 million in 2009, according to the Economic Policy Institute.

But for the working population, the situation is exactly the opposite. Between 2009 and 2011, the most recent year for which figures are available, the number of people in poverty in the United States grew by 2.6 million, to 49 million. Mass unemployment has been utilized as a lever to impose wage cuts in every sector of the economy.

Since the official end of the recession, in June of 2009, the average duration of unemployment has nearly doubled from 23 weeks to 38 weeks. The percentage of the working-age population that is employed has fallen, as anemic job growth barely keeps pace with the increase in the population and hundreds of thousands of laid-off people give up looking for work.

For those workers who still have a job, real hourly wages have fallen by about 1.0 percent. The earnings of a typical household fell by 1.7 percent in 2010 alone.

The increase in the rate of exploitation of workers has translated into huge cost savings for corporations and record profits in every year since 2009, further swelling the incomes of the super-rich.

In addition to the direct impoverishment of the work force, stock markets have been buoyed by the influx of cash from the world’s central banks.

Within the last month, the US Federal Reserve, the European Central Bank and the Bank of Japan have all taken new measures to pump hundreds of billions of dollars into the financial markets. The US Fed took the most dramatic step of the three, initiating an open-ended program to buy $40 billion in mortgage-backed securities every month, taking these toxic assets off of the banks’ balance sheets.

The ostensible purpose of these moves is to lower interest rates, revive the housing market, and increase the amount of money available for corporations to expand and hire new workers. But instead of productively investing the money, the corporations and banks are either hoarding it or pouring it into the stock market and other forms of speculation.

The total amount of cash held by major US corporations stood at $1.7 trillion in the second quarter of this year. Apple, the technology giant, is a case in point. It held $98 billion in the first quarter of this year, $110 billion in the second, and $117 billion in the third. Meanwhile, its market valuation keeps expanding and there is already talk that the company, which is currently valued at over $600 billion, will become the world’s first $1 trillion corporation.

The enormous sums of money being pumped into the financial system are inflating asset values and bankrolling record payouts for executives, whose compensation is often tied to share prices.

The inflation of asset values cannot continue indefinitely amid the deepening economic slump. The growth of share values and other financial assets, based mainly on a near-zero interest-rate policy and virtually free money from the central banks, is inflating a new and even more gigantic speculative bubble than the one that burst in September of 2008.

The upsurge in stock values does not reflect a healthy economy, but one that is deeply diseased, in which the intractable contradictions of the capitalist system are exacerbated by a ruthless and avaricious financial aristocracy that dictates policy in the United States and internationally.

The US ruling class, first under Bush and then under Obama, responded to the crash of 2008, which was the inevitable outcome of the financialization of American capitalism, by handing over trillions of dollars in public funds to the banks. The aim was to reflate the values of financial assets in order to maintain and increase the wealth of the financial aristocracy.

World governments have followed suit, with each bailout of the banks accompanied by an ever more ferocious attack on workers. Everything must be cut: wages, pensions, health care, education—everything, that is, but the wealth of those responsible for the crisis.

The financial vultures who control the main investment houses send stock markets soaring with each new assault on jobs and social programs—as they did Friday after the Spanish government, presiding over a country in deep recession, unveiled a draft budget that slashes spending by $51 billion next year.

The key to the “success” of finance capital to this point has been its ability to isolate and quash outbreaks of working class resistance, relying on the services of the trade union apparatuses and their allies among the various pseudo-left organizations (the New Anti-capitalist Party in France, the Socialist Workers Party in the UK, the Left Party in Germany, SYRIZA in Greece, the International Socialist Organization in the US).

However, the actions of the central banks and governments have resolved nothing. The euphoria on the stock exchanges rests on rotten foundations. The rising markets are one expression of an unprecedented intensification of social tensions that are already beginning to erupt in the form of explosive class struggles on a world scale. A new, revolutionary leadership must be built in every country to unite these struggles and arm them with a socialist and internationalist program.

 

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As Popular Opposition Grows Austerity Budgets imposed across Europe

By: Alex Lantier

Source: Global Research

http://www.globalresearch.ca/as-popular-opposition-ggrows-austerity-budgets-imposed-across-europe/

The French, Spanish and Greek governments all announced multibillion-euro austerity plans yesterday in the face of massive popular opposition.

The French budget presented by the Socialist Party (PS) government of President François Hollande is the harshest since the austerity budgets of the early 1980s under PS President François Mitterrand. It calls for €30 billion (US$38.6 billion) in deficit cuts, including €20 billion in tax increases and €10 billion in spending cuts.

The Spanish budget calls for €13.4 billion in spending cuts in the fourth major package of austerity measures passed this year following the election of the conservative Popular Party (PP) last November. The ministries whose budgets will be most severely cut include Agriculture, Industry and Education.

Greece’s coalition government—which includes the right-wing New Democracy (ND), the social democratic PASOK, and the Democratic Left (DIMAR)—announced that it will unveil a plan Monday for €11.5 billion in spending cuts. Plans for these cuts were first announced in July, but the government initially failed to reach an agreement on how to distribute them.

In each country, the new austerity measures are being pushed through in defiance of public opinion. On Wednesday, millions of workers throughout Greece walked off the job and hundreds of thousands protested in a one-day national strike. On Tuesday, tens of thousands of protesters opposed to the cuts marched to the parliament in Madrid and were brutally attacked by riot police.

In France, Hollande’s popularity ratings have fallen to 43 percent as job losses and austerity measures antagonize voters who elected him in May.

These events demonstrate the impossibility of fighting social austerity in Europe by supporting the bourgeois “left” parties, the European Union (EU), or European capitalism. In a matter of months, the promises made by the official parties have proven worthless.

Hollande cynically promised that “austerity is not an unavoidable destiny.” The Greek coalition government received the tacit support of the bourgeois “left” SYRIZA party, which ran against it ostensibly on an anti-austerity platform, but then pledged to be a “responsible” opposition that would not call strikes and would continue to support the European Union.

As for the PP—elected on the basis of mass hostility to the austerity policies of the previous social democratic Spanish Socialist Workers Party (PSOE) government—its pretense that it would not pursue Greek-style austerity in exchange for an EU bailout of its banks is fast evaporating.

The PP’s cuts to pensions and social spending and its attacks on labor rights are the most severe since the collapse of the fascist Franco dictatorship. Reductions in national state spending of €16.5 billion, €27 billion and €65 billion passed in January, April and July—combined with deep cuts in regional government spending—are sinking Spain’s economy.

One quarter of Spanish workers and 52.9 percent of Spanish youth are unemployed, and despite pledges for bank bailouts the economy is contracting. The International Monetary Fund anticipates a 1.2 percent contraction of Spain’s economy, though the government’s cuts are based on apparently overoptimistic projections of a 0.5 percent contraction.

Spain now pays more to service its debt than it spends on unemployment benefits or the budgets of its national ministries. Since the global economic crisis began in 2008, its public debt has more than doubled, jumping from 35.5 percent to 75.9 percent of gross domestic product (GDP), and the interest rate it pays on its debt has surged as a result of speculation against Spanish bonds by the banks and finance houses.

Spain’s banks are poised to request another €60 billion bailout as the Spanish real estate collapse continues to undermine their balance sheets.

The effect of such policies is most clearly seen in Greece, whose economy is now projected to plunge by 7 percent this year, instead of the previously projected 4.7 percent. Since the Greek debt crisis began in 2009, its economy has contracted by roughly one quarter.

Der Spiegel reported that, due to this continuing collapse, EU authorities expect Greece’s budget shortfall to reach €20 billion. They will then demand more cuts in Greece beyond the €11.5 billion Athens is currently proposing. As laid out in July, these include €5 billion in cuts to the Labor Ministry budget (mainly to pensions) and attacks on Greece’s devastated public hospitals.

These massive cuts—the corresponding amounts would be $802 billion in the United States, £82 billion in Britain and €136 billion in Germany—will ravage a society in which those workers who have managed to keep their jobs have already seen wage cuts of 30-50 percent.

The negotiation of the cuts will place take amid deepening conflict within Greece’s political elite. There is speculation that DIMAR might collapse, as at least three of its 17 parliamentarians have declared they plan to vote against the cuts.

Greece’s Financial Crimes Squad (SDOE) recently released a list of thirty politicians, including former ministers and top parliamentarians of ND, PASOK and SYRIZA, who are suspected of tax evasion or other forms of fraud.

France’s austerity package cuts €10 billion from the national budget of €376 billion by imposing a wage and hiring freeze on public sector workers, imposing a 5 percent across-the-board cut in the ministries’ projected budgets, and cutting €2.7 billion in health care spending. The Defense, Finance and Ecology ministries are reportedly particularly hard hit, with losses respectively of 7,234, 2,353 and 1,276 jobs.

As for the €20 billion in tax increases, half are to be achieved by closing certain corporate loopholes, and half by increasing taxes on individual households.

The PS government and the media have trumpeted the fact that roughly half of the individual tax increases will be borne by “affluent” households. This is an attempt to obscure the anti-working class character of the Socialist Party’s policies. The tax rate for the top income tax bracket is to be raised to 45 percent, and yearly wage income over €1 million is to be taxed at 75 percent.

To seriously examine these measures, one must briefly enter the realm of French tax policy—which means confronting what Karl Marx, in The Class Struggle in France, called the “sheer swindling” that characterizes France’s financial affairs.

In 2010, the top 1 and 10 percent of the French population took in €181 billion and €515 billion, respectively. Nonetheless, the increase in the top tax bracket and the tax on wage income over €1 million combined will raise only €530 million nationwide. The total of €6 billion raised by increasing taxes on the affluent, including by closing some corporate loopholes, does not amount to a substantial portion of their income.

In part, this is because of a complex system of tax exemptions that Hollande’s measures do not seriously touch. These exemptions allowed billionaire Liliane Bettencourt to pay a 9 percent effective tax rate in 2010 on the hundreds of millions of euros she earned on her $24 billion fortune.

In part, also, it is because most income in the ruling class is interest income on capital holdings, not wages—which means that Hollande’s “75 percent tax” does not seriously impact most members of the financial aristocracy.

Nonetheless, the austerity budget was denounced by sections of the press, with Figaro Magazine titling its lead article “Enough is Enough.”

Sections of the bourgeoisie supporting the PS are arguing that the current austerity budget is only a down payment on deeper attacks on the working class being prepared by the PS government. These include proposals for labor market “reforms” to facilitate hiring, firing and forcing workers into short-time work, as well as for €30-50 billion in cuts to corporate funding of social security.

An editorial in Le Monde stressed the need for a “true ‘competitiveness shock’ in our country.” It stated: “The 2013 budget does not really contribute to it. Promised cuts in the labor market and the financing of social spending will be decisive in this regard. Today’s budget shock will only be meaningful if it is rapidly complemented by a powerful competitiveness shock to give France the electroshock therapy it needs.”

 

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