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Tuesday, August 13, 2013

Economic Stories of Relevance in Today's World -- August 11, 2013

It's time to look out for the middle class!

Billionaire Issues Chilling Warning About Interest Rate Derivatives
- The Economic Collapse Blog - Michael Snyder - August 5th, 2013
- Will rapidly rising interest rates rip through the U.S. financial system like a giant lawnmower blade? Yes, the U.S. economy survived much higher interest rates in the past, but at that time there were not hundreds of trillions of dollars worth of interest rate derivatives hanging over our financial system like a Sword of Damocles. This is something that I have been talking about for quite some time, and now a Mexican billionaire has come forward with a similar warning. Hugo Salinas Price was the founder of the Elektra retail chain down in Mexico, and he is extremely concerned that rising interest rates could burst the derivatives bubble and cause "massive bankruptcies around the globe". Of course there are a whole lot of people out there that would be quite glad to see the "too big to fail" banks go bankrupt, but the truth is that if they go down our entire economy will go down with them. Our situation is similar to a patient with a very advanced stage of cancer. You can try to kill the cancer with drugs, but you will almost certainly kill the patient at the same time. Well, that is essentially what our relationship with the big banks is like. Our entire economic system is based on credit, and just like we saw back in 2008, if the big banks start failing credit freezes up and suddenly nobody can get any money for anything. When the next great credit crunch comes, every important number in our economy will rapidly start getting much worse.                       The big banks are going to play a starring role in the next financial crash just like they did in the last one. Only this next crash may be quite a bit worse. Just check out what billionaire Hugo Salinas Price told King World News recently...                Right now, there are about 441 trillion dollars of interest rate derivatives sitting out there.  If interest rates stay about where they are right now and they don't go much higher, we will be fine.  But if they start going much higher, all bets will be off and we could see financial carnage on a scale that we have never seen before.
                          And at the moment the big banks have got to behave themselves because the government is investigating allegations that they have been cheating pension funds and other investors out of millions of dollars by manipulating the trading of interest rate derivatives.  The following is from an article that the Telegraph posted on Friday...

Internet TVs may drive consumers to cut pay TV cord - USA Today - Mike Snider - August 8, 2013 - Most likely to cancel their pay-TV service? Owners of Internet-connected TVs.                  Those with TVs connected to the Net are twice as likely as those with non-Internet-connected TVs to be "highly inclined" to cancel their current pay-TV service, finds a new study from research firm The Diffusion Group.                    Overall, about 7% of pay-TV subscribers said they were highly likely to cancel their service in the next six months, the firm's survey of 1,878 pay-TV users conducted during the first quarter of 2013 found. But those who had connected their TVs to the Net had even higher rates of cord-cutting potential. Nearly 9% (8.8%) said they were highly likely to cut the cord, compared with 3.5% of those who had not connected their TV to the Net.                      Industry observers have expected that high-speed Internet connectivity and the availability of online video from services such as Netflix, Amazon Instant Video and Hulu would lead to consumers cutting or trimming pay-TV bills.                            Today there are many ways to get online video to the TV — game consoles, Blu-ray players, set-top boxes — and many TVs have Wi-Fi and apps on board. Net-connected TVs appear to be a significant factor that spurs cord cutting, says Michael Greeson, president of The Diffusion Group.                        "Something has happened in the minds of these consumers when they have been exposed to these online video services via these Net-connected TVs," he says. "They are more likely to cut the cord because of the availability of these other services."                          Overall, pay TV providers lost about 210,000 video subscribers in the second quarter of 2013, says Vijay Jayant of the International Strategy and Investment Group. Cable losses of about 420,000 and satellite TV losses of 160,000, were partially offset by 370,000 subscribers gained by telecom companies such as AT&T and Verizon.                              Pay-TV penetration peaked from 2006 to 2009 at about 82% of U.S. homes, according to                        PricewaterhouseCoopers. That's likely to fall to 79% in 2014, the consulting firm estimates.
TV providers have tried to hold onto subscribers by bundling TV, telephone and other services, as well as adding access to programming on tablets and smartphones.                            But the growth in Net TV and cost of programming — as evidenced by the ongoing dispute between CBS and Time Warner Cable — "is almost like a perfect storm" that's unraveling the traditional pay-TV providers' grip. "They are not going to be the only game in town, and they are losing their leverage," Greeson says.

Trading Economics - A look at Debt/GDP/Growth/Population Indices

Dr. Paul Craig Roberts - Former US Treasury Official, Co-Founder of Reaganomics, Economist & Acclaimed Author - Dr. Paul Craig Roberts is an American economist, a columnist and recent author of “The Failure Of Laissez Faire Capitalism”. He served as an Assistant Secretary of the Treasury in the Reagan Administration earning fame as a co-founder of Reaganomics. He is a former editor and columnist for the Wall Street Journal, Business Week, and Scripps Howard News Service. Dr. Roberts has testified before congressional committees on 30 occasions on issues of economic policy. He has also written extensively that during the 21st century the Bush and Obama administrations have destroyed the US Constitution's protections of Americans' civil liberties and has been a critic of both Democratic and Republican administrations.

King World News Interview - August 11, 2013

Gerald Celente - Founder & Director of the Trends Research Institute - Gerald has had a long track record of making some of the most controversial, yet correct calls in terms of global trends and events. In fact, many consider Gerald to be the top trends forecaster in the world. Gerald has been quoted and interviewed in media throughout the world such as, CNBC, Fox, CBS, ABC, NBC, BBC, Time Magazine, The New York Times, The Wall Street Journal, Business Week, Financial Times, U.S. News, World Report, The Economist, L.A. Times, Chicago Tribune, Washington Post, and more.

King World News Interview - August 10, 2013

Young People drowning in Student Loan Debt

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