Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.
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Topics today include:
What Babies See and Hear Inside the Womb
IMF Suggests the Basic Universal Income May Be Necessary in an Automated World
Has Gold's Rise Run Its Course?
Well Fargo Presents Latest Proof that Crime Does Pay
No Terror Group Yet Connected to NYC Blast
Money Supply Growing at Fastest Rate in 3 Years
Why the EU is Doomed
Merkel Drubbed at the Polls Again
Netherlands Pumped a lot of Gas, Now Earthquakes Shake the Country
Putin Strengthens Control of Duma as 60% of Russians Don't Vote
China Keeps Pumping More Stimulus
Articles about events, conflicts and disease around the world
Wells Fargo: Who Says Crime Doesn't Pay (Zero Hedge) No punches pulled by ZH is discussing what looks to be the biggest scandal since the banks sold junk mortgages as triple-A mortgage backed securities. And so far it looks like the same thing is happening now as then: Bank executives getting bonuses and golden parachutes while a few thousand low-level employees who were the boots on the ground for the bankster army got fired. While many have criticized Obama's presidency for a variety of things, history may judge him most harshly for failure to clean-up the criminal activity that banking has become.
Police seek clues in New York blast that hurt 29; no terrorism links found (Reuters) New York Governor Andrew Cuomo said on Sunday there was still no indication that an explosion that injured 29 people in Manhattan on Saturday was linked to international terrorism, while investigators scoured the scene of the blast. FBI investigators were to examine remnants of the bomb plus an unexploded device found four blocks away and another device that exploded about 80 miles (130 km) away in New Jersey on Saturday to see if they were connected, Cuomo said. No international group had claimed responsibility "but it is very, very early in the investigation," the state governor told reporters, reiterating what New York City Mayor Bill de Blasio had said hours after the blast.
The money supply is growing at its fastest rate in 3 years (Business Insider) The "true money supply" measure is a measure of the money supply pioneered by Murray Rothbard and Joseph Salerno and is designed to provide a better measure than M2. The Mises Institute now offers regular updates on the TMS metric and its growth. Since 2014, money supply growth has ranged from about 7% to 8.5%. In October of last year, money supply growth hit a seven-year low of 6.8 percent, although this proved not to be an indication of any new trend. Overall, money supply growth has been quite stable over the past two years. In July, however, money supply growth hit a 36-month high, reaching a year-over-year growth rate of 8.6%. Growth has not been as high since August of 2013, when growth reached a rate of 8.9%.
Why the EU Is Doomed (Mises Institute) The reason given here is the insufficiency of the ECB (European Central Bank) to respond to financial crisis the way other central banks do. The system is crippled by the continued existence of country-central banks and a lack of political unity for the euro area. This essay is a good read, although the end game described is only one of the possible ends for the EU:
All the elements for a mighty political and economic smash are now there. Whether or not it will be the trigger for, or itself be triggered by external events remains to be seen. Either way, the Eurozone’s crisis time-line now appears to be measured in months.
The market effect, besides being a severe shock to all markets, is likely to be two-fold. Firstly, international flows will sell down the euro in favor of the dollar. Given the euro’s weighting in the dollar index, this will be a major disruption for all currency markets. Secondly, Eurozone residents with bank deposits are likely to increasingly seek refuge in physical gold, as signs of their currency’s impending collapse emerge, because there is nowhere else for them to go.
Whichever way one looks at it, it is increasingly difficult to accept any other outcome than a complete collapse of this ill-found political construction, originally promoted in US interests by a CIA-sponsored organization. The euro, being dependent on political cohesion instead of original market demand, will simply cease to be money, somewhat rapidly.
Merkel suffers drubbing in Berlin vote due to migrant angst (Reuters) Chancellor Angela Merkel's conservatives suffered their second electoral blow in two weeks on Sunday, with support for her Christian Democrats (CDU) plunging to a post-reunification low in a Berlin state vote due to unease with her migrant policy. The anti-immigrant Alternative for Germany (AfD) polled 11.5%, gaining from a popular backlash over Merkel's decision a year ago to keep borders open for refugees, an exit poll by public broadcaster ARD showed. The result means the AfD will enter a 10th state assembly, out of 16 in total. Merkel's CDU polled 18 percent, down from 23.3% at the last election in 2011, with the center-left Social Democrats (SPD) remaining the largest party on 23%. The SPD may now ditch the CDU from their coalition in the German capital.
QuickTake Q&A: Earth-Shaking Woes at Europe’s Biggest Gas Field (Bloomberg) Much is remarkable about the Groningen natural gas field in the Netherlands, about a two-hour drive northeast of Amsterdam. The largest such deposit in Europe, it’s already used 77% of its reserves. It’s run as a joint venture of the world’s two largest public oil companies, Royal Dutch Shell Plc and ExxonMobil Corp. And it’s caused hundreds of earthquakes, some of them strong enough to damage homes in nearby farming communities. The Dutch government, accused of being late to respond to residents’ complaints, is placing more limits on extraction of gas, which increase Europe’s reliance on gas imports. Econintersect: That little Dutch boy had better put more fingers in the dike.
Moscow says strikes on Syria army threaten U.S.-Russia ceasefire plan (Reuters) Moscow stepped up its war of words with Washington on Sunday, saying air strikes by a U.S.-led coalition on the Syrian army threatened the implementation of a U.S.-Russian ceasefire plan for Syria and bordered on connivance with Islamic State. The diplomatic dispute heated up on the last day of a seven-day ceasefire marred by a surge of violence as warplanes hit the strategic northern city of Aleppo for the first time since the truce came into effect. In another blow to hopes for the ceasefire, the governor of Homs said several hundred rebels would be evacuated from the last rebel-held district of the Syrian city on Monday, prompting rebels to warn any such step would amount to the government declaring the end of the truce. On Saturday, the Russian Defence Ministry said U.S. jets had killed more than 60 Syrian soldiers in the eastern Syrian city of Deir al-Zor in four air strikes by two F-16 and two A-10 fighter jets coming from the direction of Iraq.
Putin’s United Russia keeps control after poll (CNBC) Russia’s Duma elections on Sunday preserved the ruling party’s status as largest faction in the lower house of parliament according to exit polls and early partial counts as many voters dissatisfied with the government’s performance stayed at home. United Russia, the main pro-Kremlin party, received 48.4% of the popular vote, according to an exit poll conducted by FOM, one of the two pollsters regularly working with the Kremlin. The other Kremlin-backed pollster Vtsiom put United Russia’s share of the vote at 44.5%. The Central Election Commission said United Russia’s share of the vote stood at 46.28% after about 11 per cent of votes were counted at 10pm. The CEC said turnout was just under 40% as of 7pm Moscow time, two hours after the last polling station closed.
China Expected to Keep Its Deep Pockets Open to Boost Its Economy (Bloomberg) China is seen keeping its deep pockets open in the second half and through 2017, despite having front-loaded spending earlier this year, as fiscal policy takes over from broad monetary easing as the major prop to growth. The central government’s fiscal deficit will surpass the target of 3% of gross domestic product set for 2016, according to economists surveyed by Bloomberg News. The broader ('augmented') shortfall that wraps in revenues from land sales, policy banks and other channels will also sink deeper into the red. As the graphic below shows, the pump volume keeps increasing:
Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea
Robots, Growth, and Inequality (IMF) This article discusses the problems of even more income distortions as more and more robots are implemented and fewer people employed. The argument is for some type of income distribution along the lines of what has come to be called "universal basic income". The conclusion:
The advantages of a basic income financed by capital taxation become obvious. Of course, globalization and technological innovation have made it, if anything, easier for capital to flee taxation in recent decades. Our analysis thus adds urgency to the question “Who will own the robots?”
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