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The American Dream Has Moved to Scandinavia

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We noted in 2010 that the American Dream – the possibility of a “rags to riches” success story – has moved abroad … since social mobility in the U.S. is much lower than in many other developed nations [5].
(And we pointed out that conservatives are as disturbed as liberals [6] by the collapse of social mobility in modern America.)
A paper published last year by University of Ottawa economics professor Miles Corak tells us [7] exactly where the American Dream has gone … to Scandinavia.  Here’s a chart from the study:
 [8]Denmark, Norway and Finland have the most social mobility (and Sweden is not that far behind).
On the other hand, the UK, Italy and America have the least social mobility.
True, the UK and Italy are a tiny bit worse than the U.S. in terms of social mobility.  But the U.S. has the most inequality.  Indeed, the U.S. arguably has the worst inequality anywhere in the world at any time in history [9]. Indeed, inequality is so severe in America that most of the profits are flowing into the hands of an incredibly small group [10] of people … and you’re not very likely to become one of them.
On the other hand, Sweden, Finland, Denmark and Norway have the least inequality. In other words, it’s a lot more likely that you can get a reasonable slice of the pie there.
Indeed, Norway is arguably the world’s most prosperous [11] country. Denmark is 4th; Sweden is 6th; and Finland is 8th … but the U.S. has dropped down to 10th [12] place.
Sadly, the American Dream is now spoken with a Scandinavian accent.
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Did they want more violence in Ferguson? 10 ‘coincidences’ too glaring to ignore

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Was it a conspiracy or was it incompetence? Those appear to be the only two alternatives that we are left with after the horrific violence that we witnessed in Ferguson on Monday night. The first round of Ferguson rioting back in August took everyone b…

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Netherlands, Germany Have Euro Disaster Plan – Possible Return to Guilder and Mark

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The Dutch and German governments were preparing emergency plans for a return to their national currencies at the height of the euro crisis it has emerged. These plans remain in place.

German Gold Deutsche Mark – (Special Edition)
The Dutch finance ministry prepared for a scenario in which the Netherlands could return to its former currency – the guilder. They hosted meetings with a team of legal, economic and foreign affairs experts to discuss the possibility of returning to the Dutch guilder in early 2012. 
The Dutch finance minister during the period has confirmed that Germany also discussed such scenarios.
At the time the Euro was in crisis, Greece was on the verge of leaving or being pushed out of the Euro and the debt crisis was hitting Spain and Italy hard. The Greek prime minister Georgios Papandreou and his Italian counterpart Silvio Berlusconi had resigned and there were concerns that the eurozone debt crisis was spinning out of control – leading to contagion and the risk of a systemic collapse.
A TV documentary broke the story last Tuesday. The rumours were confirmed on Thursday by the current Dutch minister of finance, Jeroen Dijsselbloem, and the current President of the Eurogroup of finance ministers in a television interview which was covered by EU Observer andBloomberg.
“It is true that [the ministry of] finance and the then government had also prepared themselves for the worst scenario”, said Dijsselbloem.
“Government leaders, including the Dutch government, have always said: we want to keep that eurozone together. But [the Dutch government] also looked at: what if that fails. And it prepared for that.”
While Dijsselbloem said there was no need to be “secretive” about the plans now, such discussions were shrouded in secrecy at the time to avoid spreading panic on the financial markets.
When asked about Germany, Dijsselbloem said he couldn’t say whether that country’s government had made similar preparations.
German Silver Deutsche Mark – (1951-1974)
However, Jan Kees de Jager, finance minister from February 2010 to November 2012, acknowledged that a team of legal experts, economists and foreign affairs specialists often met at his ministry on Fridays to discuss possible scenarios.
“The fact that in Europe multiple scenarios were discussed was something some countries found rather scary. They did not do that at all, strikingly enough”, said De Jager in the TV documentary.
“We were one of the few countries, together with Germany. We even had a team together that discussed scenarios, Germany-Netherlands.”
When the EU Observer requested confirmation from Germany, the German ministry of finance did not officially deny that it had drawn up similar plans, stating simply:
“We and our partners in the euro zone, including the Netherlands, were and still are determined to do everything possible to prevent a breakup of the eurozone.” 
This is quite a revelation. At that time the German finance minister Wolfgang Schauble had said that the Euro could survive without Greece. Whether it could survive without the Dutch is another matter entirely.
A Euro without Holland and especially Germany is currently inconceivable. De Jager also states that other countries found the prospect of a Euro break-up frightening.
So much so that they buried their heads in the sand rather than deal with the situation facing them. It appears that no emergency contingency plans were made in the unfortunately named PIIGS nations – Portugal, Ireland, Italy, Greece and Spain.
One has to wonder if the plans would have been made public had a TV documentary not forced the Dutch government to confirm the claim.
It is interesting to note that it is these two countries, Germany and Netherlands, whose citizens have also been at the forefront of the gold repatriation movement currently sweeping across Europe – France’s second largest party entered the fray this week.
In a climate with a lack of faith in fiat currencies, any return to a purely fiat guilder or mark would be risky in the absence of the confidence that gold backing provides.
Despite the implication that secrecy is no longer necessary because Europe is over the worst we believe the Dutch repatriation of 20% of it’s sovereign gold from the U.S. indicates that the Dutch are still, wisely, preparing for the worst – whether that be a euro crisis or indeed a dollar crisis and an international monetary crisis.
Their stated reason for returning their 122 tonnes of gold to Netherland’s soil was to instil public confidence in the Dutch central bank.
The prospect of a Euro-break up is a frightening one. It would appear that most Eurozone nations are ill-prepared and indeed unprepared for. 
As always we recommend investors act as their own central bank by taking delivery of bullion or keeping gold and silver in secure, allocated and segregated vaults in safer jurisdictions such as Switzerland and Singapore.
For investors and savers currently using the euro, it begs the important question do you have a euro failure contingency plan? 
Indeed, for investors and savers internationally using other fiat currencies, it begs the important question do you have a currency failure contingency plan? 
While the risks in peripheral European nations of reversion to their national currencies and currency devaluations have diminished – some risks still remain.
The risk is that individual national governments may elect to take this route rather than suffer deflationary economic collapse and Depressions. Alternatively, it could happen through contagion or a systemic event like the collapse of a large European bank, a la Lehman Brothers, that leads to a domino effect jettisoning a member state out of the monetary union.
It could also come about should the German people and politicians decide that the European monetary project is not worth saving or they decide that it cannot be saved and elect to return to the Deutsche mark.
All significantly indebted nations, so called PIIGS and non PIIGS such as Japan, the UK and the U.S. are at risk of currency devaluations.
Competitive currency devaluations or the debasement of currencies for competitive advantage and currency wars poses real risks to the long term stability and prosperity of all democracies in the world and to the finances and savings of people in all countries.
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UC Davis Economics Professor: There Is No American Dream

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DAVIS (CBS13) — A UC Davis economics professorhas determined there is no American Dream.
Gregory Clark is sharing his research as a hard truth with no hope—whether or not you can get ahead in America is as predictable as any formula.
In fact, he says, the formulas for social mobility in the United States show there’s nothing to dream about.
“America has no higher rate of social mobility than medieval England, Or pre-industrial Sweden,” he said. “That’s the most difficult part of talking about social mobility is because it is shattering people s dreams.”
Clark crunched the numbers in the U.S. from the past 100 years. His data shows the so-called American Dream—where hard work leads to more opportunities—is an illusion in the United States, and that social mobility here is no different than in the rest of the world.
“The status of your children, your grandchildren, your great grandchildren your great-great grandchildren will be quite closely related to your average status now,” he said.
UC Davis students CBS13 spoke to dismissed the findings.
“The parents’ wealth has an effect on ones life but it’s not the ultimate deciding factor,” Andy Kim said.
Clark has heard the naysayers before.
“My students always argue with me, but I think the thing they find very hard to accept, is the idea that much of their lives can be predicted from their lineage and their ancestry,” he said.
Stuck in a social status is no American Dream—Clark says it’s the American reality.
“The good news is that this is coming from an economist, because economists are used to being unpopular, and so we are the right people to bear this message that the world is a limiting place,” he said.
There’s one caveat to the study, and that is for any one of us, there is always an exception to the rule.
Clarks’ study was published by the Council on Foreign Relations.

https://sacramento.cbslocal.com/2014/11/26/uc-davis-economics-professor-there-is-no-american-dream/

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Regin, new computer spying bug, discovered by Symantec

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A leading computer security company says it has discovered one of the most sophisticated pieces of malicious software ever seen.Symantec says the bug, named Regin, was probably created by a government and has been used for six years against a range of …

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Russia-China trading settlements in yuan increases 800%

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Settlements in yuan between China and Russia have increased ninefold in annual terms between January and September 2014, says the Chinese Ministry of Economic Development.
“The settlement in national currencies between China and Russia in bilateral trade amounted to about 2 percent in 2013. There has been a significant growth in 2014. In particular, the use of the yuan in mutual settlements increased nine times in the first nine months of 2014.” TASS quotes Lin Zhi, head of the Europe and Central Asia Department of the Chinese Ministry of Economic Development.
“About 100 Russian commercial banks are now opening corresponding accounts for settlements in yuan. The list of commercial banks where ordinary depositors can open an account in yuan is also growing.”the official said.
On November 18 Russia’s Sberbank became the first Russian bank to begin financing letters of credit in Chinese yuan.
Half of the trade between Russia and China could be carried out in yuan and rubles provided China removes restrictions on currency transactions for Russian banks, said Deputy Finance Minister Aleksey Moiseyev in September. The restrictions don’t allow Russian banks to keep yuan received from exporters for a long time.
Russia and China have been boosting cooperation primarily in the financial and energy sectors and are planning to have a trade turnover of $200 billion by 2020.
Switching to settlements in domestic currencies can largely contribute to balancing the global economy by reducing the impact of the dollar on the world financial and energy markets, President Vladimir Putin said at the APEC Summit last week.
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The Real Reason Why Germany Halted Its Gold Repatriation From The NY Fed

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Following the stunning announcement in January 2013 that the Bundesbank would repatriate 674 tons of gold from the NY Fed and the French Central Bank, a year later the Bundesbank followed up with a just as stunning revelation that of the 84 tons the bank was supposed to bring back home, it had managed to obtain just a paltry 37 tons, with only 5 tons originating from the NY Fed.
The reason given for this disappointing amount was as follows:

The Bundesbank explained [the low amount of US gold] by saying that the transports from Paris are simpler and therefore were able to start quickly.” Additionally, the Bundesbank had the “support” of the BIS “which has organized more gold shifts already for other central banks and has appropriate experience – only after months of preparation and safety could transports start with truck and plane.” That would be the same BIS that in 2011 lent out a record 632 tons of gold…

Going back to the main explanation, we wonder: how exactly is a gold transport “simpler” because it originates in Paris and not in New York? Or does the NY Fed gold travel by car along the bottom of the Atlantic, and is French gold transported by a Vespa scooter out of the country?

Supposedly, there was another reason: “The bullion stored in Paris already has the elongated shape with beveled edges of the “London Good Delivery” standard. The bars in the basement of the Fed on the other hand have a previously common form. They will need to be remelted [to LGD standard]. And the capacity of smelters are just limited.”

Or, simply said, generic pretexts for a failure to follow through with the Bundesbank’s original intention of redomiciling physical gold, especially after Zero Hedge posted in November 2012 proof of collusion between the 1968 Bank of England and the Fed seeking to defraud Deutsche Bank: ‘Bank Of England To The Fed: “No Indication Should, Of Course, Be Given To The Bundesbank…”
The charade ended with a thud in June of this year, when instead of continuing the farce, Germany simply gave up, providing an even more laughable reason why it can no longer even pretend to collect its physical gold located at New York’s 9 Liberty Street.

Germany has decided its gold is safe in American hands. “The Americans are taking good care of our gold,” Norbert Barthle, the budget spokesman for Merkel’s Christian Democratic bloc in parliament, said in an interview. “Objectively, there’s absolutely no reason for mistrust.”

And that was it: not a single word more from Germany on the topic of its failed gold repatriation initiative. Until this week, when Deutsche Bank – the bank which is Germany’s equivalent to America’ Goldman Sachs in terms of policy decision-making – once again revealed just what the true reason behind the failure of Germany’s attempt to bring its gold back. From Robin Winkler’s special report:

… the gold community paid great attention to the decision of the German Bundesbank to “bring German gold home”. At the beginning of 2013, the Bundesbank announced it would repatriate 300 tonnes of gold stored in the US by 2020. It is well behind schedule, citing logistical difficulties. Yet diplomatic difficulties are more likely to be the chief cause of the delay, especially seeing as the Bundesbank has proven its capacity to organise large-scale gold transports. In the early 2000s, the Bundesbank incrementally repatriated 930 tonnes of German gold held by the Bank of England.

Because if anyone knows what really happened behind the scenes in Germany, and inside closed doors at the Bundesbank, it is Deutsche Bank.
And there you have it: it wasn’t transportation, or “good delivery standards” concerns, or anything remotely related to Germany “decididng its gold is safe in American hands”, but just the opposite: Germany was pressured to keep its gold in the US after a “diplomatic” line of communication was opened, most likely the result of the Fed making it all too clear clear to the Bundesbank not only who runs the show, but what the assured failure to repatriate Germany’s gold would mean for “price stability.”
Which has, for now at least, ended Germany’s gold repatriation demands.
Now the question is, just how will the US pressure the Swiss “diplomatically” to make sure its own gold repatriation referendum does not succeed. Because if Germany failed miserably to obtain 674 tons of gold in 2013, it is assured that Switzerland will find absolutely nothing in its quest to obtain more than double, or 1,500 tons, of gold as a successful November 30 referendum outcome would require.
Then again, considering it was Obama’s action that destroyed the Swiss banking sector after the US crushed the centuries-long tradition of “Swiss banking anonymity”, this could be just the right action with which “neutral” Switzerland could finally take its revenge on the regime that cost it what was for centuries the primary source of capital inflow into the small and so very prosperous (until then) central-European nation.
https://www.zerohedge.com/news/2014-11-16/real-reason-why-germany-halted-its-gold-repatriation-ny-fed

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Lira looks set for comeback

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Italy is heading for the exit. While it might seem fanciful for one of the founding members to consider leaving the euro, there is a growing sense that no more than a couple of years from now, Rome will once again be administering its own currency.
Figures last week revealed a country in deep crisis. With GDP still almost 10% smaller than before the financial crisis, it is stuck in a deep depression.
All efforts to revive the economy have failed, such is the sclerotic nature of its tax rules, business markets and labour laws. Combined, they have prevented progress to a more effective economy unencumbered by traditional subsidies and benefits.
Meanwhile, Spain and Ireland have contrived to push through reforms, bolster their banks, and move ahead. Even Greece’s economy is growing, according to the most recent official figures.
There was a time when Italy’s middle-income earners would dismiss talk of a euro exit. Their savings were held in euros and all their other assets, especially their property, enjoyed a secure value in the common currency. To leave the euro would be to court a huge drop in wealth.
That fear appears to be evaporating. Beppe Grillo’s Five Star Movement has moved its position to one of outright opposition to the euro. The comedian-turned-politician is promoting a petition to pull out. More broadly, promise after broken promise of growth has undermined support for Brussels and the European Central Bank.
Italians have waited three years for ECB boss Mario Draghi to copy the money-printing exercises at the Bank of England and US Federal Reserve. Draghi talks endlessly of pumping funds into the eurozone’s ailing economies, only to pull back. Last week he was at it again.
But even when a Draghi boost comes, it is unlikely to be effective. Italians know themselves. They need a currency devaluation. It is the only saviour. The Japanese have done it. And as the other major country funding a massive public sector debt, it looks like a good role model.
Make no mistake, a return to the lira will be painful. Yet it looks like something voters are willing to contemplate to stop the economy forever sliding backwards.
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Apple Now Worth More Than Entire Russian Stock Market

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With Apple at record highs, its market capitalization is now bigger than Russia’s entire stock market (the 20th largest market in the world). What’s more,as Bloomberg notes, there would be enough money left over after selling Apple and buying Russia to purchase over 190 million contract-free 64Gb iPhone6 Pluses (enough for every Russian).
If you owned Apple Inc., and sold it, you could purchase the entire stock market of Russia, and still have enough change to buy every Russian an iPhone 6 Plus.
…
Russia, the 20th largest among the world’s major markets, is not the only one Apple has surpassed. The company, which forecasts a record holiday-sales quarter and has $155 billion in cash, is also bigger than 17th-ranked Singapore and 18th-ranked Italy.
*  *  *

https://www.zerohedge.com/news/2014-11-14/apple-now-worth-more-entire-russian-stock-market 

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Putin “Prepares For Economic War”, Buys Whopping 55 Tonnes Of Gold In Q3

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Just as China is buying ‘cheap’ oil with both hands and feet, so Russia, according to the latest data from The World Gold Council (WGC) has been buying gold in huge size. Dwarfing the rest of the world’s buying in Q3, Russia added a stunning 55 tonnes …

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