Saturday, July 20, 2019

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Former FOMC Member Admits The Fed Manipulates Asset Prices

by Dave Kranzler, Investment Research Dynamics:

The Fed often treats financial markets as a beast to be tamed, a cub to be coddled, or a market to be manipulated. It appears in thrall to financial markets, and financial markets are in thrall to the Fed, but only one will get the last word. – Former FOMC member, Kevin Warsh – The Fed Needs New Thinking

Please note, a large portion of the source links, plus the idea for this commentary, were sourced from GATA’s latest dispatch regarding the possible appointment of Warsh as the next Fed Chairman.

The quote above is from former FOMC board member,  Kevin Warsh, who appears to be Trump’s top candidate to assume the Fed’s mantle of manipulation from Janet Yellen.   By way of relevant reference, Warsh happens to be the son-in-law of Ronald Lauder,  who is a good friend of Trump’s.  He is also a former Steering Committee member of the Bilderberg Group.    GATA has published a summary reprise of direct evidence from previous written admissions by Warsh the the Fed actively manages financial asset prices, “including bolstering the share price of public companies” (from link above).

In addition to stocks, Warsh admitted in the same essay that, “The Fed seeks to fix interest rates and control foreign-exchange rates simultaneously” (same link above). This task is impossible without suppressing the price of gold, something which began in earnest in 1974 when, under the direction of then Secretary of State, Henry Kissinger, paper gold futures contracts were introduced to the U.S. capital markets. This memo, written by the Deputy assistant Secretary of State for International Finance and Development, was sent to Kissinger and Paul Volcker in March 1974: Gold and the Monetary System:  Potential U.S.-EC Conflict (note:  the source-link is from GATA – it was discovered in the State Department archives by Goldmoney’s John Butler).

The nature of discussions after that memo, the minutes of which are now publicly available, center around the fact that several European Governments were interested in re-introducing gold into the global monetary system.  This movement was in direct conflict with the interests of U.S. elitists and banking aristocrats, as U.S. had successfully established  the petro-dollar as the reserve currency.

In 2009 GATA sent a Freedom Of Information Act request to the Fed in an attempt to get access to documents involving the Fed’s use of gold swaps (this letter written by Warsh confirms the existence of the use of gold swaps).  Warsh, who was the FOMC’s “liaison” between the Fed and Wall Street, wrote a letter back to GATA denying the request.

The fact that Warsh has openly acknowledged that the Fed manipulates assets, including an implicit admission that the Fed seeks to suppress the price of gold,  might give some in the gold community some hope that Warsh, if appointed to the Chair of the Fed, might reign in the Fed’s over interference in the financial markets.

On the contrary, I believe this makes him a bigger threat to democracy, capitalism and freedom than any of his recent predecessors.  Warsh is better “pedigree’d” and politically connected than either Bernanke or Yellen.  His high level involvement in the Bilderberg Group ties him directly to the individual aristocrats who are considered to be the most financially and politically powerful in the western world.    Without a doubt he has far more profound understanding of the significance of gold as a monetary asset than any modern Federal Reserve FOMC member except, perhaps, Alan Greenspan.

The good news for the gold investing community is that it becomes increasingly evident that China, together with Russia and several other eastern bloc countries, is working to remove the dollar as the reserve currency and reintroduce gold into the global monetary system.  A contact and subscriber to my Mining Stock Journal who happens to live and work in Shanghai has sent further evidence  (and here) that China is working toward launching a gold-backed yuan oil futures contract.

Read More @ InvestmentResearchDynamics.com

Catalan Officials Meet to Plan Independence

by Stephen Lendman, StephenLendman:

On Monday, Catalan officials met in Barcelona. Referendum results showed 90{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the autonomous region’s residents support independence from fascist Spain.

Catalan President Carles Puigdemont chaired a Monday cabinet meeting. He’s expected to ask regional parliamentarians to vote on an independence declaration within days, calling Sunday’s vote valid, binding, and had to be applied, adding:

“My government in the next few days will send the results of the vote to the Catalan parliament, where the sovereignty of our people lies, so that it can act in accordance with the law of the referendum.”

EU officials can no longer “continue to look the other way.” At the same time, Puigdemont called for international mediation to help resolve a standoff with Madrid, saying “(w)e don’t want a traumatic break…We want a new understanding with the Spanish state.”

Catalan trade unions and associations called a region-wide strike for Tuesday, protesting Madrid’s “grave violation of rights and freedoms.”

In Madrid, PM Mariano Roy is meeting with ruling People’s Party officials, discussing how to confront Catalonian independence if declared as expected.

Spain’s El Pais broadsheet blamed Catalan officials for Sunday’s “shameful” events, Madrid bears full responsibility for. It also blamed Rajoy’s regime for failing to prevent the independence referendum from taking place – calling Sunday “a defeat for our country.”

Read More @ StephenLendman.org

“Systemic” Age Discrimination in Tech, even as Tech Workers Get “Better with Age”

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by Wolf Richter, Wolf Street:

But “ageism” exists “across all industries,” not just Tech.

Many people have seen this with their own eyes as it happened to others, or have experienced it themselves even as companies have vigorously denied it. So finally, here are some numbers that expose blatant age discrimination in the Tech industry, both in hiring and promotions, and it’s even worse than the age discrimination in Non-Tech industries.

The study boils down to this: if you’re a Baby Boomer, forget it. And if you’re Gen X, it’s tough.

These numbers are not based on VC-funded startups where the two founders may be 27 and 28 and the oldest people of the bunch. No one even bothers to mention age discrimination in these outfits. It’s just a fact of life. No, these numbers are based on an analysis of over 330,000 US-based employees – 63,000 in Tech and 267,000 in other industries – from 43 large companies. This is Corporate America.

Here is what the study by Visier, which provides workforce analytics for HR professionals, found: “Systemic ageism is occurring in Tech hiring practices.”

Here are some nuggets:

  • Millennials (aged 20 to 33) make up 43{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the workforce in Tech, compared to 26{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in Non-Tech.
  • Gen X workers (aged 34 to 51) make up 45{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the Tech workforce, compared to 47{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} for non-Tech.
  • Baby Boomers (aged 52 to 70) make up less than 12{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the Tech workforce, compared to 27{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in Non-Tech.
  • Non-manager workers in Tech are on average 38 years old and thus five years younger than Non-Tech workers (43 years old).
  • Managers in Tech are on average 42 years old, vs. 47 in Non-Tech – not that managers in Non-Tech industries don’t face age discrimination, it’s just not as brazen.

But performance is not the problem.

The study found that the older workers in Tech had more “Top Performer” ratings in their respective jobs. Some nuggets:

  • “From age 40 onward, non-manager workers in Tech enter the ‘Tech Sage Age’ and are increasingly likely to receive a Top Performer rating as they age, mature, and gain experience, compared to Non-Tech.”
  • The proportion of Top Performers in Tech increases with age, but in Non-Tech industries the proportion decreases.
  • “This suggests that maturity and experience are more important drivers of high performance in Tech than in Non-Tech industries.”

Despite the high performance of older workers in Tech, they’re being discriminated against via both, hiring practices and promotions:

  • Tech hires a higher proportion of younger workers and a smaller proportion of older workers than Non-Tech.
  • Notably, the Tech Sage Age does not translate into higher promotion rates for older non-manager workers in Tech. Rather, promotion rates for Tech workers decrease continuously with age as they do in Non-Tech.

This produces a “disconnect” for older workers between their rising performance and their declining promotions with age. In a sidebar, Visier’s report cited a study by researchers from the computer science department at North Carolina State University that found that programming knowledge actually improved with age:

Using Stack Overflow user data, they found a correlation between age and reputation. They found that: “…programmer reputation scores increase relative to age well into the 50s, that programmers in their 30s tend to focus on fewer areas relative to those younger or older in age, and that there is not a strong correlation between age scores in specific knowledge areas.”

As older programmers are “getting better with age,” what are their salaries doing?

Turns out, non-manager workers in Tech and Non-Tech experience similar salary trajectories: The median salary for workers in both sectors increases in the first phases of the career and peaks in their early 40s, at which point it “stabilizes” for both – that is, it begins to decline slightly for both.

However managers in Tech experience some salary increases as they age – if they remain employed in Tech, which, as the above numbers show, is very hard to do.

The study summarizes: “We found that hiring decisions in Tech do indeed favor younger candidates” compared to Non-Tech industries. Millennials are the big winners – at the expense of Gen X candidates and Baby Boomers.

Read More @ WolfStreet.com

Fall of the Great Pumpkin

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by James Howard Kunstler, Kunstler:

Welcome to the witching month when America’s entropy-fueled death-wish expresses itself with as much Halloween jollity and merriment as the old Christmas spirit of yore. The outdoor displays alone approach a Babylonian scale, thanks to the plastics factories of China. I saw a half-life-size T-Rex skeleton for sale at a garden shop last week surrounded by an entire crew of moldering corpse Pirates of the Caribbean in full costume ho-ho-ho-ing among the jack-o-lanterns. What homeowner in this sore-beset floundering economy of three-job gig-workers can shell out four thousand bucks to decorate his lawn like the set of a zombie movie?

The overnight news sure took on that Halloween tang as the nation woke up to what is probably now confirmed to be a national record for a civilian mad-shooter incident. So far, fifty-eight dead and over 500 hundred injured in Las Vegas at the Route 91 Harvest Festival (Nine up in fatalities from last year’s Florida Pulse nightclub massacre, and way more injured this time).

The incident will live in infamy for maybe a day and a half in the US media. Stand by today as there will be calls far and wide, by persons masquerading as political leaders, for measures to make sure something like this never happens again. That’s rich, isn’t it? Meanwhile, the same six a.m. headlines declared that S &P futures were up in the overnight markets. Nothing can faze this mad bull, apparently. Except maybe the $90 trillion combined derivatives books of CitiBank, JP Morgan, and Goldman Sachs, who have gone back whole hog into manufacturing the same kind of hallucinatory collateralized debt obligations (giant sacks of non-performing loans) that gave Wall Street a heart attack in the fall of 2008.

Europe’s quaint doings must seem dull compared to the suicidal potlatch of life in the USA, but, believe me, it’s a big deal when the Spanish authorities start cracking the heads of Catalonian grandmothers for nothing more than casting a ballot. The video scenes of mayhem at the Barcelona polls looked like something out of the 1968 Prague uprising. And now that the Catalonia secession referendum passed with a 90 percent “yes” vote, it’s hard to imagine that a good deal more violent mischief will not follow. So far, the European Union stands dumbly on the sidelines. (For details, read the excellent Roel Ilargi Meijer column on today’s TheAutomaticEarth.)

Next in the cavalcade of October traumas: the USA versus the nuclear weapons ambitions of North Korea. This has been ramping up all year, of course, but it looks to be headed for a climax now that the Golden Golem of Greatness is at the helm. Truly astounding, though, is America’s new method for conducting the most sensitive matters of foreign policy. The day after Secretary of State Rex Tillerson declared that his office was in contact with North Korean officials, the Secretary’s boss, You-Know-Who, tweeted out: “I told Rex Tillerson, our wonderful Secretary of State, that he is wasting his time trying to negotiate with Little Rocket Man.”

Could this possibly be a cleverly orchestrated good cop / bad cop effort to bamboozle Kim Jung-un? Or is the US government just completely dysfunctional? Or maybe something else is afoot. Under normal circumstances, Mr. Tillerson would just resign after such a gross insult, but we must suppose that a patriotic sense of duty compels him to remain in office in case the need suddenly arises in this witching month to run over Mr. Trump with the 25th amendment — the clause in the constitution that allows a consensus of a pretty small number of national political leaders to toss out a sitting president on the grounds of derangement and incompetence. Stay tuned on that one.

Read More @ Kunstler.com

IMF Head Foresees the End of Banking and the Triumph of Cryptocurrency

by Jeffrey Tucker, The Foundation for Economic Freedom:

In a remarkably frank talk at a Bank of England conference, the Managing Director of the International Monetary Fund has speculated that Bitcoin and cryptocurrency have as much of a future as the Internet itself. It could displace central banks, conventional banking, and challenge the monopoly of national monies.  

Christine Lagarde–a Paris native who has held her position at the IMF since 2011–says the only substantial problems with existing cryptocurrency are fixable over time.

In the long run, the technology itself can replace national monies, conventional financial intermediation, and even “puts a question mark on the fractional banking model we know today.”

In a lecture that chastised her colleagues for failing to embrace the future, she warned that “Not so long ago, some experts argued that personal computers would never be adopted, and that tablets would only be used as expensive coffee trays. So I think it may not be wise to dismiss virtual currencies.”

Here are the relevant parts of her paper:

Let us start with virtual currencies. To be clear, this is not about digital payments in existing currencies—through Paypal and other “e-money” providers such as Alipay in China, or M-Pesa in Kenya.

Virtual currencies are in a different category, because they provide their own unit of account and payment systems. These systems allow for peer-to-peer transactions without central clearinghouses, without central banks.

For now, virtual currencies such as Bitcoin pose little or no challenge to the existing order of fiat currencies and central banks. Why? Because they are too volatile, too risky, too energy intensive, and because the underlying technologies are not yet scalable. Many are too opaque for regulators; and some have been hacked.

But many of these are technological challenges that could be addressed over time. Not so long ago, some experts argued that personal computers would never be adopted, and that tablets would only be used as expensive coffee trays. So I think it may not be wise to dismiss virtual currencies.

Better value for money?

For instance, think of countries with weak institutions and unstable national currencies. Instead of adopting the currency of another country—such as the U.S. dollar—some of these economies might see a growing use of virtual currencies. Call it dollarization 2.0.

IMF experience shows that there is a tipping point beyond which coordination around a new currency is exponential. In the Seychelles, for example, dollarization jumped from 20 percent in 2006 to 60 percent in 2008.

And yet, why might citizens hold virtual currencies rather than physical dollars, euros, or sterling? Because it may one day be easier and safer than obtaining paper bills, especially in remote regions. And because virtual currencies could actually become more stable.

For instance, they could be issued one-for-one for dollars, or a stable basket of currencies. Issuance could be fully transparent, governed by a credible, pre-defined rule, an algorithm that can be monitored…or even a “smart rule” that might reflect changing macroeconomic circumstances.

So in many ways, virtual currencies might just give existing currencies and monetary policy a run for their money. The best response by central bankers is to continue running effective monetary policy, while being open to fresh ideas and new demands, as economies evolve.

Better payment services?

For example, consider the growing demand for new payment services in countries where the shared, decentralized service economy is taking off.

This is an economy rooted in peer-to-peer transactions, in frequent, small-value payments, often across borders.

Four dollars for gardening tips from a lady in New Zealand, three euros for an expert translation of a Japanese poem, and 80 pence for a virtual rendering of historic Fleet Street: these payments can be made with credit cards and other forms of e-money. But the charges are relatively high for small-value transactions, especially across borders.

Instead, citizens may one day prefer virtual currencies, since they potentially offer the same cost and convenience as cash—no settlement risks, no clearing delays, no central registration, no intermediary to check accounts and identities. If privately issued virtual currencies remain risky and unstable, citizens may even call on central banks to provide digital forms of legal tender.

So, when the new service economy comes knocking on the Bank of England’s door, will you welcome it inside? Offer it tea—and financial liquidity?

New models of financial intermediation

This brings us to the second leg of our pod journey—new models of financial intermediation.

One possibility is the break-up, or unbundling, of banking services. In the future, we might keep minimal balances for payment services on electronic wallets.

The remaining balances may be kept in mutual funds, or invested in peer-to-peer lending platforms with an edge in big data and artificial intelligence for automatic credit scoring.

Read More @ Fee.org

This is how China moves the world to a gold standard! – Bill Holter

by Bill Holter, Miles Franklin:

We have watched for years as China grew in strength economically, financially and militarily. They have pre positioned themselves by making trade deals, setting up credit facilities and even an alternative clearing system to the West’s “SWIFT”. We also know China has been gobbling up global mine supply of gold for going on 10 years now. As I’ve written in the past, just using the back of a napkin, it can be surmised they now have hoarded 20,000 tons or more compared to the “supposed” 8,133 tons held by the U.S..

It is clear China has meticulously readied themselves to take the role of world leadership from the U.S. but do they really want the responsibility AND burden of issuing the reserve currency? This has always been the question and the answer from logical thinkers is “no”. No, because we (and of course China) have seen the result of the “burdens” that comes along with the privilege of issuing the reserve currency. I must confess, I too did not believe China would desire or even accept the responsibility of reserve currency status. I now believe this thought is mistaken! I will explain shortly.

The announcement of “yuan for oil, convertible into gold” is a game changer http://www.zerohedge.com . China imports about 8 million barrels of oil per day, this works out to 3 billion barrels per year. At $50 per barrel, the oil trade by China is about $150 billion per year. If we compare that to total global production of gold, we find the 80 million ounces produced and priced at $1,300 currently amounts to just over $100 billion. In other words, China consumes more oil (in dollar terms) than ALL the gold produced in the world. Think about this for a moment, at current pricing, just one country uses more oil than the entire world produces money? Does the word “reset” at all come to mind?

Taking just one step back, China has over the last few years imported roughly 2,000 tons of gold per year. If we add India’s imports of roughly 1,000 tons per year, we see combined they are importing more than the 2,500 that are produced. These numbers by themselves illustrate that the gold supply had to come from somewhere …and that “somewhere” can only be from Western vaults. In order to extend and pretend their financial systems and currencies were sound, the West (led by the U.S.) has been bleeding their gold reserves.

Now, getting back to China, here is why I believe they are leading the world BACK to a gold standard! If China imports oil and pays with yuan and offers their yuan “convertible” into gold, how many oil producers will take them up on the conversion? Certainly not 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} and maybe not 50{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. Maybe the number is only 25{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} or even less but that’s not important as “time” will take over. You must ask yourself, how long can China and India import 3,000 tons while the world only produces 2,500 tons? Where will another 1,000 tons (or maybe much more?) of demand be satisfied if oil producer’s newly acquired yuan are converted to gold? The easy answer is “they cannot” …AT CURRENT PRICES!

Here is the interesting part and where I believe I was mistaken in previous thought. China watched as the U.S. was bled of gold leading up to 1971. They also know we have been bleeding gold ever since as a way to camouflage the credit bubble and gross over issuance of dollars. They understand the game and do not want to be placed in the same quandary if the yuan becomes the reserve currency. Instead, I believe China is leading the world toward a de facto gold standard by diverting what was previously “oil for dollars” into “oil for gold”. I believed China might mark gold higher by making a bid and ask price at much higher numbers, instead, facilitating and using natural demand makes so much more sense.

By making yuan convertible into gold, China in essences is creating a demand they know cannot be met by supply … (again) AT CURRENT PRICES! Why would they do this? It is actually so simple I feel dumb for not seeing this previously. China actually kills an entire flock of birds at one time!

First, they are THE largest owner of gold on the planet so they are in fact marking the value of their treasury up by multiples. The higher future price of gold will also make it very difficult if not impossible for other nations to catch up in gold accumulation. By freeing the gold price, China is assuring their place as a world financial leader for many years if not many centuries as that is their mindset. They know quite well, gold is lasting wealth and also the phrase “he who has the gold makes the rules”!

Second, they will in essence be devaluing the yuan versus gold. This will have many benefits and too broad of a subject to breach here but think back to 1934 when the U.S. devalued the dollar versus gold, it creates “inflation” and makes debt easier to pay and service as well as giving a bump to the real economy.

Next and of great importance, moving the world “naturally” to a gold standard means moving away from the dollar standard and all the unfairness that goes with it. A world moving toward gold (China) is a world moving away from the dollar. Surely the dollar will devalue versus the yuan via lower demand from the oil trade and also the lessening of “power” afforded as issuer of the reserve currency. The U.S has enforced the dollar standard by military use for years. Is this action by China “neutral” enough and free market enough to avoid military conflict? We can only hope and pray the U.S. does not kick the table over in reaction.

Read More @ MilesFranklin.com

SMOKING GUN=> San Juan Teamsters Didn’t Show Up for Work to Distribute Relief Supplies – US Aid Rotting at Ports

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by Jim Hoft, The Gateway Pundit:

The liberal media is pounding President Trump over the suffering in Puerto Rico after Hurricane Maria.

The San Juan Mayor slammed President Trump for ignoring the suffering people of Puerto Rico.

She said this while standing in front of pallets of US aid from the mainland.

Now we know why the people have no aid.
The Teamsters Union drivers did not show up to work.
Only 20{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of drivers arrived at the ports to distribute the relief supplies.

Conservative Treehouse reported:

Puerto Rican born and raised, Colonel Michael A. Valle (”Torch”), Commander, 101st Air and Space Operations Group, and Director of the Joint Air Component Coordination Element, 1st Air Force, responsible for Hurricane Maria relief efforts, has the following comment:

…They have the generators, water, food, medicine, and fuel on the ground, yet the supplies are not moving across the island as quickly as they’re needed.

“It’s a lack of drivers for the transport trucks, the 18 wheelers. Supplies we have. Trucks we have. There are ships full of supplies, backed up in the ports, waiting to have a vehicle to unload into. However, only 20{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the truck drivers show up to work. These are private citizens in Puerto Rico, paid by companies that are contracted by the government”.. (link)

More… here.

The union is reportedly not allowing drivers to remove goods from the Port of San Juan.

Read More @ TheGatewayPundit.com

My Quick Take On The Vegas Massacre

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from TruthNeverTold:

The Violent Face of the EU is Revealed in Catalonia

by Tom Luongo, Russia Insider:

Spain’s violent opposition in Catalonia peels back the veneer of what the EU truly stands for…control.

Despite the best efforts of the European establishment, the Catalonia referendum finally went ahead as scheduled. Violence ensued.  Spain’s central government believes its laws are primary.

And that they have the right to suppress dissent based on that belief.

Because that is always what happens when a government’s authority is directly threatened by the people’s desire for something else. Violent suppression.

This event is a stark reminder of what George Washington said of government, “… is not reason, it is not eloquence — it is force. Like fire it is a dangerous servant and a fearful master; never for a moment should it be left to irresponsible action.

All of the niceties of orderly society dissolve when it reaches this point.  It’s all smiles and high-minded ideals until someone says, “No thanks. I don’t want what you’re selling.”

And that’s when the tanks roll in.

Governments operate on the mistaken belief that we cannot function without them.  They, and their apologists, are wrong.

Prime Minister Mariano Rajoy, obviously under the orders of his EU masters and handlers in Brussels, learned nothing from history. He learned nothing from Tienanmen Square, the Berlin Wall, Moscow or even Brexit.

You cannot stop an idea whose time has come.  And thanks to one of the worst miscalculations by a government in a generation what was lukewarm support for independence galvanized into a near unanimous expression of disgust.

89{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} for, 11{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} against

Catalonia – Years in the Making

I’ve been following this story for years; watching it build to this point.  If it didn’t turn into violence this time then it would have the next.  Catalonia was told multiple times this vote was ‘illegal’ and yet they planned for it anyway.

They were told not to draft founding documents, and yet they did so.  While the official polling had Catalan independence support hovering below the 50{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} line, it beggars logic that those polls were accurate given the response from Rajoy’s government.

Simply put, the polls were lying and support for independence was far higher than anyone was willing to admit.  After the past two weeks of egregious moves to stop the vote from taking place, Spain’s central government created even more independent radicals.

This is a point lost in the apologia emanating from normally sober observers of geopolitics, in this case “B.” from Moon of Alabama, trying to frame this vote as anti-democratic.

Catalonia has a GDP per capita of some $33,580/year. For Spain as a whole the GDP per capita is $26,643/year. Many factors account for the difference. Catalonia has an advantages in climate, in the vicinity of the French border, the high attractiveness for tourists with its capital Barcelona and its beaches. It has a well developed industry. But the “rest of Spain” is also, by far, its biggest market.

A richer part of the country does not want to subsidize the poorer ones. But it still wants to profit from them.

In general, the splitting off of sub-states from the bigger, established nations weakens both.

The wistfulness of “B’s” tone here tells you everything you need to know.  He’s an unabashed German leftist.  His soak-the-rich ideology is more important than the right of people to be free to choose their destiny.

The final line quoted is laughable on the face of it.

If the arrangement between Catalonia and the rest of Spain was good for both we wouldn’t be here.  This isn’t some variation on ‘white privilege’ for rich Catalans.  It’s simple economics.

The EU is Broke(n)

Governments around the world are broke.  They are especially broke in the EU.  Catalonia no longer wanted to subsidize the debt incurred by Spain’s government (which is, frankly, insane) on top of the wealth transfers already in place.

Madrid opposed the vote because of the potential for breakdown of European capital markets and the inability for the European Central Bank to cover the fallout.  That’s where Rajoy’s orders came from.

Read More @ Russia-Insider.com