ohomen171's Journey Through Life

Life Is Better In France And Germany Than In The USA

2012-01-23T09:44:00.001-08:00

Life In Parts Of Europe Is Better Than In The USA!

Mon 23 Jan 2012, 18:49 0 comment(s) Email articleReport Abuse

This Is America Today, Part II

These facts are from the CIA—and they are undisputed:

• Infant mortality rate in the United States: 6.06 per 1,000 live births.

• Infant mortality rate in France: 3.29 per 1,000 live births.

• Average life expectancy in the United States: 78.37 years (75.92 for men, 80.93 for women).

• Average life expectancy in France: 81.19 years (78.20 for men, 84.54 for women).

• Total expenditure on health care in the United States: 16.2% of GDP (2009).

• Total expenditure on health care in France: 3.5% of GDP (2009).

• Expenditure on health care in the United States per capita: $7,517 per year (2009).

• Expenditure on health care in France per capita: $1,148 per year (2009).

So . . . to make it clear: France has a Socialist-Commie health care system, while the United States has “the best health care system in the world”—

—and yet the French live longer, have an infant mortality rate roughly half the United States’, and yet still manage to spend lessthan Americans on health care.

A lot less—in fact, the Socialist-Commie Frogs spend less than a quarter of what the United States does, as a proportion of GDP.

And when you break it down per person per year? The French spend less than one-sixth what the United States spends—yet live longer, and have a lower infant mortality rate

These are the facts—and they are undisputed.

So! One of two things is going on: Either the French—as a people—are simply better than Americans; made of finer stuff; simplysuperior physical specimens.

Or . . .

Big Pharma, Big Med and Big Insurance are stealing from the American people every last bit of money they can get their hands on, while the Federal government refuses—out of incompetence, stupidity or corruption—to do anything about this rampant, blatant theft.

Too harsh, you say? Well, next time you go bankrupt from your medical bills, tell me again if I’m being too harsh. Because if you go bankrupt in America, there’s a 60% chance it will be because of medical bills. And if you do go bankrupt because of medical expenses? There’s a 40% chance you actually did have medical insurance—yet went bankrupt anyway! (Source here)

These are the facts—and they are undisputed.

This is America today.

(Source: CIA World Factbook, French data here, U.S. data here.)

Germany has the economic strengths America once boasted

Germany with its manufacturing base and export prowess is the U.S. of yesteryear, an economic power unlike any of its European neighbors. It has thrived on principles America seems to have lost.

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By Don Lee, Los Angeles Times

January 21, 2012, 7:33 p.m.

Reporting from Elz, Germany—

Every summer, Volkmar and Vera Kruger spend three weeks vacationing in the south ofFrance or at a cool getaway in Denmark. For the other three weeks of their annual vacation, they garden or travel a few hours away to root for their favorite team in Germany'sbiggest soccer stadium.

The couple, in their early 50s, aren't retired or well off. They live in a small Tudor-style house in this middle-class town about 30 miles northwest of Frankfurt. He's a foreman at a glass factory; she works part time for a company that tracks inventories for retailers. Their combined income is a modest $40,000.

Yet the Krugers have a higher standard of living than many Americans who have twice that income.

Their secret: little debt, frugal habits and a government that is intensely focused on high production, low inflation and extensive social services.

That has given them job security and good medical care as well as well-maintained roads, trains and bike paths. Both of their adult children are out on their own, thanks in part to Germany's job-training system and heavy subsidies for university education.

For instance, Volkmar's out-of-pocket costs for stomach surgery and 10 days in a hospital totaled just $13 a day. College tuition for their son runs about $260 a semester.

Germany, with its manufacturing base and export prowess, is the America of yesteryear, an economic power unlike any of its European neighbors. As the world's fourth-largest economy, it has thrived on principles that the United States seems to have gradually lost.

It has tightly managed its budget and adopted reforms — such as raising the retirement age — that some other Eurozone nations are just now being forced to undertake. And few countries can match Germany's capabilities for producing and exporting machinery and other equipment, or its infrastructure for research, apprenticeships and financing that support manufacturing.

"German industry is strong," said Volkmar, speaking in halting English as he occasionally looks up translations on a laptop. "People work good. That's why the German economy is best in Europe."

Indeed, Germany was the only major Eurozone nation to escape the credit downgrades that have hit its neighbors. And the country continues to anchor the continent's economy.

Still, Germany has its share of challenges.

Income inequality, while less pronounced than in the U.S., is rising. Most workers, including the Krugers, have seen little or no real wage gains in recent years. And the nation's population is declining.

And now, with Europe on the ropes, Germany faces both a declining market for its exports and the prospect of having to cough up tens of billions of dollars more to help bail out profligate Eurozone neighbors.

Even so, German business and consumer confidence has held up well. The nation's jobless rate fell last month to a two-decade low of 6.8%, considerably lower than in much of Europe and the U.S.

And though its industrial production is starting to soften, Germany so far has maintained an impressive trade surplus with the rest of the world, including China.

Germany's economy looks like that of the U.S. a generation ago.

In 1975, manufacturing accounted for about 20% of the United States' economic output, or gross domestic product, about the same as in Germany today. Since then, U.S. manufacturing's share of GDP has slid to about 12%.

In 1975, the U.S. budget deficit was a manageable 1% of the economy, about the same as Germany's now. Last year, the U.S. deficit was about 10%.

American families in the 1970s and early '80s typically saved about 10% of their take-home pay, about the same as in Germany today. The U.S. savings rate these days is in the low single digits.

Germany, like China, fiercely promotes its exports and has been reluctant to ramp up domestic spending, frustrating Washington, which wants to sell more American goods abroad.

That may be good for Germany, but many critics say the country's lack of consumption causes unhealthy imbalances for the regional and global economies, much the way America's overconsumption and borrowing does.

But Germany's economic practices and lifestyle are deeply ingrained in a culture that fears debt and inflation. In many ways, for instance, the nation discourages consumerism. Its streets aren't plastered with the billboards that dot the U.S.. Taxes on goods and services are high. Many shops and restaurants in Germany are closed Sundays.

Many smaller stores don't even take credit cards. Volkmar laughed about how consumers in other countries pull out plastic for the smallest of purchases.

"In France you pay for your croissant with your credit card. In Germany, they don't like it," he said, referring to both merchants and consumers.

Since paying off their home loan recently, the Krugers have almost no debt. They sock away money for old age and summer trips, and they rarely eat out.

Household liabilities in Germany have been rising, but remain lower than those in other developed countries. By one common measure, Germany's household debts were 97.5% of total after-tax income in 2010, compared with 125% for the U.S.

Still, the Krugers and other Germans are seeing a rise in freewheeling spending, especially among the young. Volkmar said he gets a lot of credit card offers. More marketing, however, doesn't mean that a lot of consumers are getting credit.

"In truth, it's not easy credit," said Fasun Batmaz, a manager at a TeamBank consumer unit whose name, Easy Credit, belies the rigorous process and strict requirements. "Only a handful come in and may get it."

Easy doesn't describe the Krugers' lives either. On weekdays and every few Saturdays, Volkmar is out the door by 5 a.m., driving 45 minutes to his factory. Vera also works some Saturdays. But neither gets paid more when they work additional hours, nor do they get paid less when they work fewer hours. Over time, the hours balance out.

A similar idea is behind a work-sharing system that many experts said helped Germany avoid the mass layoffs that swept the U.S. during the Great Recession. A company might reduce the hours of all workers to avert laying off an employee.

Germany's lower unemployment rate also reflects its orientation toward formal vocational training.

The Krugers' older child, Thorsten, was interested in books from an early age, and prepared for a university education. Their daughter, Nadine, got a vocational diploma in social work that included three years of schooling after high school, with the final year being on-the-job training at half pay.

About one-fourth of all German businesses take part in this apprenticeship program; six of 10 apprentices end up getting hired permanently, said Dirk Werner of the Cologne Institute for Economic Research.

The practice, he said, is a key reason why Germany has one of the lowest unemployment rates for 15- to 24-year-olds, about 9.7%, according to the Organization for Economic Cooperation and Development in Paris. In the U.S., the comparable rate is about twice that.

Volkmar and others attribute part of the lower unemployment rate to the German work ethic. Yet Germans, on average, work far fewer hours a year than Americans, thanks partly to five or six weeks of vacation.

The amount of the Krugers' vacation time is typical for most Germans.

When they go to France, the Krugers take an old Volkswagen camper, but still expect to spend about $3,000 over three weeks.

Over the recent winter holiday, they took the 45-minute train ride into Frankfurt to buy Christmas presents. They picked up practical gifts: a breakfast tray, cutting board and sleeping gown for Nadine. For Thorsten, the couple bought a tool kit made in Germany.

Volkmar laughed when asked why he bought tools for his son. Thorsten asked for them, he said, adding a bit sheepishly, "The Volkswagen camper needs repair."

don.lee@latimes.com

Topics: the better life in europe

Germany has the economic strengths America once boasted - latimes.com

2012-01-23T08:52:00.000-08:00

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2012-01-23T07:31:00.000-08:00

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Gonzalo Lira: This Is America Today, Part II

2012-01-23T07:12:00.000-08:00

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Elena And I Celebrate 11 Years Together!

2012-01-23T06:30:00.001-08:00

I took Elena to La Costenera last night. This is a charming restaurant right on the Pacific Coast in Moss Beach, California. Monty Heying and his special partner Sandra joined us. We had a wonderful meal. Elena thank you for all of your love and support over the last eleven years. Thank you for making me more humane and civilized. You're a tough lady who can really take "heat" and stress! I love you very much!

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2012-01-22T22:33:00.000-08:00

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Jack's South America: A Brazilian Beach Beauty, Refined And Untouched

2012-01-22T14:22:00.000-08:00

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When An Al Jazeerah Journalist Says That War Betwen The West And Iran Is Ievitable; Take Note!

2012-01-22T11:26:00.000-08:00

Burman: Why there will be a war in the Middle East this year

Published On Sat Jan 21 2012

An Iranian woman walks past an anti-U.S. mural painted on the wall of the former U.S. embassy in Tehran on Nov. 19, 2011.

ATTA KENARE/AFP/GETTY IMAGES

By Tony Burman Special to the Star

There will be a war in the Middle East within the next several months, triggered by an Israeli attack on Iran, and this is how it will happen. Like the Iraq war, it will be a fatal blend of political arrogance and near criminal risk-taking, and this should come as no surprise to us because we know the political players. But we should also know that the time to prevent it is running out.
In Iran, the government is reeling from colossal economic and political pressures. There are signs of desperation. Western sanctions over its nuclear program are biting and there is an open power struggle among key government leaders. The murders since 2010 of four nuclear scientists — most certainly masterminded by agents of Israel’s Mossad — are deeply humiliating. With parliamentary elections in March regarded by many as the most important in the history of the Islamic republic, the pressure within Iran to hit back at Israel in some damaging way is inevitable — and this will happen soon.
In Israel, the calculation is also overwhelmingly political. The fractious government of Prime Minister Benjamin Netanyahu is obsessed with the prospect of a nuclear Iran even if the evidence is still unclear how imminent that threat is. Netanyahu is also driven by his bitter rivalry with President Barack Obama. There is growing speculation the prime minister will trigger early Israeli elections in June to shore up his political position before Obama, as Netanyahu believes, is re-elected in November. He knows his best opportunity to attack Iran will be shortly before the U.S. election when he figures Obama would be politically cornered. But Netanyahu needs a pretext to act in “self-defence” and that is why Mossad is still covertly at work inside Iran. Iran will have to retaliate before Israel can act — and this will happen soon.
In the United States, Obama is caught up in the morass of election-year politics. His likely Republican presidential rival, Mitt Romney, is accusing the president of being weak on Iran: “If you elect me as president, Iran will not have a nuclear weapon.” The U.S. and its European allies now have a deadline of July 1 to impose a full embargo of Iranian oil. Ehud Barak, Israel’s defence minister, claimed on Wednesday that a decision to launch a pre-emptive strike is “very far off.” But U.S. defence officials, according to the Wall Street Journal, are increasingly concerned that Israel is preparing to strike Iran — and this will happen soon.
READ MORE: Burman’s columns
Can we be certain that events in the Middle East will unfold in this way? Of course not. But like a high-stakes poker game where each player slowly reveals his cards, there are increasing signs that this game is careening out of control.
There is no consensus within Israel in favour of an attack on Iran. In fact, a recent poll suggests that less than half of Israelis (43 per cent) support a strike even though 90 per cent of them believe Iran will eventually acquire nuclear weapons. But the drumbeats for action are growing louder inside of Israel and they are egged on in the U.S. by the shrill tone of the extremist Republican primary process.
In Israel, the political case in favour of a strike, led by Netanyahu, points to its limited attack in 2007 on a burgeoning Syrian nuclear facility. But there are crucial differences this time. Iran’s nuclear facilities are well-dispersed and well-defended, and most experts believe that such a strike would likely fail or, at best, only delay Iran’s nuclear ambitions for a year or two.
But even more significant are the potentially frightening consequences of such a strike. Iran has threatened to hit back with full fury if its nuclear facilities are attacked. It could place Israel in considerable peril and lead to a resurgence of anti-American fever. Such a strike would also strengthen Iran’s rulers internally at a time of its greatest weakness and would radicalize the Arab world.
Serious people are doing serious work to prevent this from happening. There are meetings later this month in Tehran with officials of the International Atomic Energy Agency and the move to stiffen sanctions against Iran is accelerating. However, this first decade of the 21st century serves as no model. Disastrous decisions were made by political leaders in an environment of arrogance and stupidity, and these disasters were condoned by a public which largely chose to look the other way and a news media which, at various times, was either complicit or incompetent.
Let’s hope that, in the handling of Iran, history is not repeating itself.
Tony Burman, former head of Al Jazeera English and CBC News, teaches journalism at Ryerson University. tony.burman@gmail.com

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2012-01-21T16:09:00.000-08:00

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2012-01-21T12:31:00.000-08:00

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Finding Paul Tingley 31 Years Later

2012-01-21T08:59:00.000-08:00

In 1981 I found myself alone in Jhannesburg. I did not have much money left. A nice lady named Barbara Broadhurst rented me a room in her home.. I needed a job badly. I answered an advertisement for Paul Tingley Selections. I went to an upscale home in Randburg. I met a charming Englishman named Paul Tingley. We "hit it off" instantly. He helped me to find a nice job with what was then Price Forbes Federale Volskas. I had a decent salary and an Audi company car. Paul and his family also became my good friends. I spent my weekends with them. They were so nice even to my estranged first wife. They indicated to her, that if she came to South Africa, they would help her open a restaurant.

In September of 1981 my personal circumstances changed. My estranged first wife refused to come to South Africa to live. She claimed that South Africa would go the same way as Angola and Mocambique will all of the European population expelled. She insisted that I leave South Africa and I start my life again with her in Australia.

I left Johannesburg without saying goodbye to Paul and his wonderful family. I never had a chance to say "thank you" or "I'm sorry." I looked for him for years on the internet. He seemd to drop out of sight around 2003. I assumed that he was dead.

Yesterday afternoon I "took one more shot" on the internet. I entered "Paul Tingley in South Africa" on Google. Usually the internet search results all dealt with a famous disable Canadian yachtsman from Vancouver named Paul Tingley. For a change I found Paul Tingley Selections with an office in Cape Town and one in Bryanston. I called the Cape Town number and it had been disconnected. I called the Bryanston number. A man answered and I knew that it was Paul. I did not have the courage to talk to him. I apologized and claimed that I had a worng number.

I then drafted a letter apologizing for leaving without saying goodbye. I thanked him for all of his help and friendship. I asked him to forgive me for my thoughtlessness 31 years ago.

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2012-01-21T08:18:00.000-08:00

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2012 World Food Production And Consumption

2012-01-20T10:44:00.001-08:00

View on Mobile Phone | Read the online version.

Update on Global Food Commodities

January 20, 2012

Summary

Corn, soybeans, rice and wheat are the most important food staples consumed in the world. We monitor these commodities because market fluctuations can lead to domestic unrest in import-reliant countries. Below is an assessment of these vital commodities.

Analysis

Most countries have domestic agricultural industries. However, the majority of these countries do not produce more than what their populations can consume. Only a handful of countries are able to export significant quantities of key food staples to countries that cannot meet their consumption needs or experience temporary setbacks in their agricultural sectors.

Output from exporting countries is an important geopolitical issue. Increased demand for global food supplies can cause localized shortages and price spikes. Food shortages and price increases, in turn, can lead to political turmoil and social unrest in countries whose populations depend on these imports for survival.

The most important staple crops consumed by populations around the world are corn, rice and wheat. Soybeans have also become an important alternative source of protein, particularly in Asian diets. Corn and soybean exports are largely dominated by states in the Western Hemisphere, while global wheat supplies are primarily grown by states in the Northern Hemisphere. Asian states account for the majority of all globally traded rice, but China, the world's largest producer of rice, consumes almost all of the rice it produces.

The following breaks down the current status of each of the four major staple crops.Production forecasts are drawn primarily from the U.S. Department of Agriculture's Foreign Agriculture Service estimates.

Corn

The United States, Brazil, Argentina and Ukraine account for more than 80 percent of global corn exports. While some 90 countries rank among the world's corn importers, Japan, Mexico, South Korea and Egypt are the most import-dependent nations, purchasing more than 40 percent of all globally traded corn.

The status of the corn market depends on weather conditions in the four major exporting countries. For the United States and Ukraine, the fall corn harvest has already occurred. While U.S. production fell by only 1 percent, the country's total exports are expected to shrink by 10 percent. Ukraine, however, nearly doubled production and more than doubled exports as a result of a record-breaking harvest.

For Brazil and northern Argentina, the period from December to February is key. It is during these summer months that corn goes through its silking and filling stages. A severe drought is currently affecting the region, and the extent to which the corn crop will be affected is not yet clear. Estimates of Argentina's production have fallen by 10 percent, but the country is still projected to produce more corn this season than in each of the previous two seasons. (The most recent drought in Argentina occurred in the 2008-2009 season, during which corn production fell by about 30 percent.) Although the ongoing drought also affects Brazil, Brazilian corn output is expected to increase by several percentage points compared to 2011.

Assuming current expectations hold, Argentine and Brazilian production will reach a combined output of 87 million metric tons. Since global corn production is expected to rise by several percentage points in the 2011-2012 season, Brazil and Argentina would have to lose nearly 50 percent of their expected corn crop for global production to fall below the 2010-2011 seasonal output.

Soybeans

The popularity of soybeans is growing. While less soy is produced than the other three food staples, soybean production has increased by nearly 150 percent in the past two decades, nearly twice the rate of corn production. The United States is a major producer and exporter of soybeans, but the fastest growth has occurred in Brazil. Indeed, there is growing domestic and foreign investment into the South American soybean industry, particularly in the Mercosur countries -- Brazil, Uruguay, Paraguay and Argentina.

The rising popularity of soy can be attributed to its being a relatively cheap source of protein for humans and livestock. Most soybeans are consumed in Asia's rapidly growing markets. China consumes more soy than any other nation. It imports more than 60 percent of globally traded soy, which represents more than 80 percent of China's total annual supply. To mitigate the risk posed by a sudden disruption in the soy trade, China stockpiles its soybeans for later consumption.

The drought that is affecting corn production in Brazil and Argentina is also expected to affect soybean production as the season progresses. Projected output for Argentina this season has dropped by nearly 3 percent, but the country still expects a slight increase in production compared to the previous season. Brazil will not be as lucky. The above-average rainfall seen in soybean-producing center-west states, such as Mato Grosso, will not further compensate for the drought in Parana state. As such, soybean production in Brazil will decrease by 2 percent. This will contribute to a 3 percent decline of global soybean production. Despite this decline, Brazil is expected to become the world's largest exporter of soybeans in the 2011-2012 season following an 8 percent dip in U.S. production.

Rice

The two largest rice producers by far are India and China. The two countries collectively produce more than half of the world's rice. Much of this rice is consumed domestically, however, and only India is a significant net exporter. Controlling nearly 80 percent of global rice exports, the top exporters of rice in order of rank are Thailand, Vietnam, India, Pakistan and the United States.

The rice market is temperamental, easily thrown off by too little or too much rainfall. The majority of rice produced in the world is consumed in the country of production; only about 7 percent of the world's rice production is available on global markets. Comparatively, 11 percent of corn produced is available on global markets, 20 percent of wheat and 37 percent of soy. This makes rice the most easily destabilized of the four key staples.

The 2011-2012 season has been more stable than the previous year, despite the flooding in Southeast Asia and the drought in China during 2011, and global production rose by just over 2 percent. With a 30 percent uptick in production over the previous year and an expected 17 percent increase in exports, Pakistan was the only top-five net exporter to have a noteworthy season.

Wheat

Wheat is widely produced by countries all over the world. However, more than 90 percent of the export market is dominated by ten entities: the United States, Australia, Russia, Canada, the European Union, Argentina, Kazakhstan, Ukraine, Turkey and Uruguay. China is by far the largest producer of wheat, accounting for about 17 percent of global production (only the states of the European Union collectively produce more). However, China is not a major player in the global market because it consumes almost all it produces. Because most wheat is grown in the Northern Hemisphere, July and August are critical for adequate rainfall.

The current season's total wheat production is estimated to be up 6 percent from the previous season. The only major decline was in the United States, which saw a 10 percent drop from the previous season. Both Kazakhstan and Russia have had stellar years for wheat. Russian production increased from the previous year by more than 30 percent. Kazakhstan had its highest production in 30 years, representing a 132 percent increase over the 2010-2011 season and an expected export increase of more than 50 percent.

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Iran Seeks Strategic Accommodation With Washington

2012-01-19T06:24:00.000-08:00

Iran Seeks Strategic Accommodation with Washington

January 19, 2012

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U.S. President Barack Obama asked for direct talks with Iran in a letter to Iranian Supreme Leader Ayatollah Ali Khamenei, according to Ali Motahari, an Iranian lawmaker and member of the Majlis National Security and Foreign Policy Committee. In an interview Wednesday with Iran's semi-official Fars News Agency, Motahari said the first half of the letter consisted of threats laying out actions that would be taken if Tehran crossed the "red line" of closing the energy-vital Strait of Hormuz; the second half included a request from Obama for direct talks with Iran. The official spokesman for Iran's Foreign Ministry, Ramin Mehmanparast, confirmed that the letter had been received and added that Iran was deliberating a response.

News of the supposedly secret letter first emerged last Friday, when The New York Times reported that the Obama administration was relying on a secret channel of communication to warn the supreme leader of Iran of the consequences of crossing the line in threatening the Strait of Hormuz. Two days later, Iranian media quoted Mehmanparast as confirming receipt of the U.S. letter. He also clarified the channels through which the letter was disseminated: Susan Rice, U.S. ambassador to the United Nations, delivered the missive to her Iranian counterpart, Mohammad Khazaee. The Swiss ambassador to Tehran, Livia Leu Agosti, and Iraqi President Jalal Talabani also conveyed a similar message to the Iranian leadership, according to Mehmanparsat.

An Unlikely Appeal

We find it odd that the Iranians waited until Wednesday, after news of the letter had already been released, to claim that Obama used the letter to appeal for direct talks with Iran. Meanwhile, Washington responded with cautious ambiguity to this specific claim. While denying to AP that the U.S. president had sent a letter to Khamenei, an unnamed Obama administration official did say the United States was using other diplomatic channels to communicate with Iran. In a similar statement, National Security Council spokesman Tommy Vietor reiterated that the United States had a number of ways to communicate its views to the Iranian government and that the U.S. government remains committed to establishing a dialogue with Iran. In other words, the United States acknowledges it sent a letter to Iranian leadership through multiple diplomatic channels but denies that the U.S. president himself appealed for direct talks. It is reasonable to believe Obama would refrain from such an appeal: U.S.-Iranian back-channel negotiations have a poor track record, such negotiations do not usually begin at the presidential level, and a direct appeal for talks would invite criticism from his domestic political opponents in the middle of the presidential campaign season.

The subtleties surrounding this diplomatic correspondence matter a great deal in the context of the Persian Gulf's geopolitical climate. Now that the United States has withdrawn from Iraq, Iran is trying to exploit Washington's reduced military footprint in the region. Tehran wants to convey to its adversaries that accommodating Iran is in their best interest. The best way for Iran to get this message across is to highlight the threat Tehran can pose to the Strait of Hormuz. This explains the timing of Iran's 10-day military maneuvers that centered on the strait and began on Christmas Day.

It appears that the Iranian plan is starting to get results. The United States is admitting to opening up a dialogue with the Iranian leadership, with the ultimate aim of avoiding a military conflict in the Strait of Hormuz. The question now is how far the Iranian leadership can go in negotiating with the United States.

Opportunities and Constraints

Iran clearly has the upper hand in Iraq and holds a valuable deterrent to attack -- its ability to threaten the Strait of Hormuz -- but Tehran is also operating under considerable constraints. The U.S.-led sanctions regime is making day-to-day business for Iran increasingly difficult, forcing Iran to contrive more elaborate and creative mechanisms to maintain trade ties with demanding foreign clients. Iran is likely trying to exploit Shiite unrest in Bahrain and in Saudi Arabia's oil-rich Eastern Province, but Saudi Arabia and its Gulf Cooperation Council state allies are doing everything they can to block Iran. Although they haven't been able to stamp out the unrest, these states seem capable of mitigating Iranian meddling. Finally, in Syria, the Iranian regime can take comfort in the fact that the regime of Syrian President Bashar al Assad is thus far surviving. But Iran also wants to avoid a situation in which countries looking to limit Tehran's influence -- the United States, Turkey and Saudi Arabia, among others -- find enough reason to devote a surge of resources toward bringing down the al Assad regime, potentially depriving Iran of its foothold in the Levant.

But the United States also faces a number of constraints in trying to contain Iran. Washington has essentially ceded victory to the Iranians in Iraq, where Tehran has maintained the upper hand in managing the state's chaotic affairs. The last thing the United States wants is a military confrontation with the Islamic Revolutionary Guard Corps in the Strait of Hormuz -- a conflict that would send oil prices soaring and exacerbate already fragile global economic conditions. The United States would like to see Iran lose its ally in Syria, but it does not want to commit the military resources to ensure the regime's toppling and does not want to risk sparking a broader sectarian conflict in the region. Further east, the United States is trying to negotiate a complicated deal with the Taliban, and Washington knows that the Iranians hold a number of levers with stakeholders in Afghanistan that could attempt to derail that deal.

The constraints each side faces have created room for diplomatic discussions to take place between rivals that have employed descriptors such as "Great Satan" and "Axis of Evil" to characterize each other. This wouldn't be the first time such a dialogue has been attempted, and there is no guarantee that this will go beyond a truce. Such a truce would entail both sides agreeing not to cross each other's red lines. For Iran, that red line is a U.S. military strike. For the United States, it is Iran's attempting to close the Strait of Hormuz.

Regardless whether this dialogue commences, or which direction it takes, the Iranians benefit greatly from simple public knowledge of this letter. The best way for Iran to put its Saudi neighbors on edge is to spread the idea that the Americans are reaching out to Tehran for a deal. This may explain why Iran belatedly claimed that Obama appealed for direct talks in the letter. Saudi Arabia already doubts Washington's reliability as a security guarantor in the region, following the U.S. military withdrawal from Iraq. If the Saudis think the Americans are trying to negotiate with Iran unilaterally, Riyadh may even feel compelled to negotiate with its Persian adversary itself, just to keep up. A rush to the negotiating table is exactly what Iran wants to foment. Whether Iran can use this nascent diplomatic process to hit Tehran's aim of achieving a strategic accommodation with Washington is, of course, another question entirely.

Jack's South America: Woman In Brasil Raped On Live Television

2012-01-19T05:53:00.000-08:00

Jack's South America: Woman In Brasil Raped On Live Television: Big Brother woman ‘raped on live TV' January 18 2012 at 07:37am . Police investigation: Both Daniel Echaniz, left, and Monique Amin, right...

JacksMars: Mars And Artificial Gravity

2012-01-18T19:05:00.000-08:00

JacksMars: Mars And Artificial Gravity: https://docs.google.com/viewer?a=v&pid=gmail&attid=0.1&thid=134ed0c9c6559000&mt=application/pdf&url=https://mail.google.com/mail/?ui%3D2%26i...

A Giant Ponzi Scheme Finally Goes To Trial

2012-01-18T18:30:00.001-08:00

Trial Set for Financier Accused in Decades-Long Ponzi Scheme

By CLIFFORD KRAUSS

Published: January 18, 2012

REPRINTS

HOUSTON — A federal judge ruled on Wednesday that R. Allen Stanford, the Texas financier accused of defrauding thousands of investors in a $7 billion Ponzi scheme, will go on trial next week, nearly three years after his arrest.

At the hearing, Mr. Stanford’s lawyers said he would testify at the trial, giving him an opportunity to describe how he was beaten so seriously by a fellow inmate while in custody in Texas that his memory and ability to prepare for trial was impaired.

United States District Judge David Hittner in recent weeks ruled against motions by Mr. Stanford’s lawyers that their client was not mentally competent to stand trial and that the trial should be postponed because they had not had enough time to prepare a defense.

“My finding still remains that he is competent and ready to go,” Judge Hittner said Wednesday.

Defense lawyers for Mr. Stanford argued again this week that they needed a delay in the trial. They said that they needed more time to study possible testimony from expert witnesses on accounting procedures and that one of their contract workers involved in document preparation needed cancer surgery and would be unavailable to work for at least several weeks.

Mr. Stanford, 61, pleaded not guilty to a revised 14-count indictment charging him with defrauding nearly 30,000 investors from 113 countries in a Ponzi scheme involving bogus high-interest certificates of deposit at the Stanford International Bank, which is based on the Caribbean island of Antigua. At the hearing Mr. Stanford, who wore a green prison suit, appeared relaxed while talking with his lawyers. He closed his eyes at times while listening to the lawyers review the procedures for the trial, to start Monday.

Mr. Stanford and three other senior executives of the Stanford Financial Group are accused of lying about the growth of bank assets in investor reports, diverting more than $1.6 billion into personal loans to Mr. Stanford and engaging in wire and mail fraud and conspiracy to obstruct a Securities and Exchange Commission investigation.

According to prosecutors, Mr. Stanford skimmed money from investor funds to live lavishly, with mansions and yachts, essentially converting Antigua into a private playground.

What began as a financial scandal second only to the Bernard L. Madoff pyramid scheme that unfolded as financial markets collapsed in 2008 has devolved into a messy, slow-moving soap opera. Mr. Stanford has been represented since his arrest in 2009 by about a dozen lawyers, many of whom have either quit or were fired for various reasons. Even his current legal team has tried to resign.

Once estimated to have had a personal fortune of more than $2 billion, Mr. Stanford is now considered an indigent defendant deserving of a taxpayer-financed defense since all his assets are frozen by court order.

Mr. Stanford’s latest team of four court-appointed lawyers filed a motion last week to leave the case, explaining that they did not have sufficient resources or time to organize a proper defense. They also said their efforts had been held back when contractors preparing documents for the defense quit at the end of last year because they had not been paid for several months.

The lawyers had argued that they should be given three more months to prepare. Judge Hittner repeatedly rejected the bid, arguing that the defense team had had more than a year to prepare. Meanwhile, the contractors have returned to work after an appellate court ordered them to do so and granted them some back pay.

During a break at the hearing, Ali R. Fazel, a defense lawyer, said he was disappointed with the judge’s decision that the trial would begin on Monday.

At the hearing, defense lawyers gave some clues about their strategy. They said investors had received payments from their Stanford bank certificates of deposit on schedule until the S.E.C. sued the Stanford Financial Group. Mr. Stanford has long argued that the federal government was responsible for a run on his firm’s assets. Robert A. Scardino Jr., another defense lawyer, said, “We fully intend for Mr. Stanford to take the stand.”

Mr. Stanford was declared incompetent to stand trial last January because he had become addicted to anti-anxiety medication prescribed to him while in detention in a federal facility outside of Houston. Psychiatrists said the drug, prescribed after he had a fight with a fellow inmate over use of a telephone, probably contributed to fits of delirium.

Psychiatrists who testified for the prosecution and defense last year suggested that Mr. Stanford had become mentally incapacitated because of depression, possible brain injury suffered in the fight and addiction to medication prescribed after the beating.

Over the last year, Mr. Stanford has undergone evaluation and drug rehabilitation. He was declared competent in December to stand trial, though his lawyers say he has not had enough time to review thousands of documents to participate in his defense.

Mr. Stanford says he cannot recall events that happened before the fight. But prosecutors and doctors at the North Carolina facility say Mr. Stanford has been faking memory loss. Gregg Costa, the lead federal prosecutor, has said that Mr. Stanford is trying to “game the system.”

As the trial proceeds, the leading witness for the prosecution will be James M. Davis, the former chief financial officer of the Stanford Financial Group, who has pleaded guilty to fraud and conspiracy charges. In a plea agreement, Mr. Davis said Mr. Stanford ordered him to report false revenue and false investment portfolio balances to banking regulators as far back as 1988.

Mr. Davis and the two other former Stanford executives who have been charged in orchestrating the Ponzi scheme face separate proceedings. The prosecution and other lawyers involved in the case said the trial should last at least three weeks.

His lawyers continued to contend on Wednesday that he is not competent to stand trial.

“You’re still pushing that?” Judge Hittner responded incredulously when he heard from the defense lawyers that Mr. Stanford was unable to participate fully in his defense.

REPRINTS

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Iran, the U.S. and the Strait of Hormuz Crisis | STRATFOR

2012-01-17T07:55:00.000-08:00

Iran, the U.S. and the Strait of Hormuz Crisis | STRATFOR:

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The Last Bomb : US Army Air Forces : Free Download & Streaming : Internet Archive

2012-01-16T19:31:00.000-08:00

The Last Bomb : US Army Air Forces : Free Download & Streaming : Internet Archive:

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The Washington Monthly - The Magazine - Fighting the Last War

2012-01-16T09:34:00.000-08:00

The Washington Monthly - The Magazine - Fighting the Last War:

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The "Little American Woman" Who Revolutionalized Digital Medical Records

2012-01-15T10:40:00.001-08:00

Digitizing Health Records, Before It Was Cool

Andy Manis for The New York Times

The campus of Epic Systems, the electronic health records supplier, in Verona, Wis. Its reputation as a creative place to work draws programmers who might otherwise go to high-tech giants.

By MILT FREUDENHEIM

Published: January 14, 2012

REPRINTS

VERONA, Wis.

Enlarge This Image

Minh Uong/The New York Times

Epic Systems

Judith Faulkner, the C.E.O., below, started the company more than 30 years ago, when its three employees worked in the basement of an apartment house. It now employs 5,100.

Enlarge This Image

Andy Manis for The New York Times

A sculpture of the Cat in the Hat greets workers at Epic's campus, whose quirky features also include a giant slide.

THE push to move the nation from paper to electronic health records is serious business. That’s why a first look at the campus of Epic Systemscomes as something of a jolt.

A treehouse for meetings? A two-story spiral slide just for fun? What’s that big statue of the Cat in the Hat doing here?

Don’t let these elements of whimsy fool you. Operating on 800 acres of former farmland near Madison, Wis., Epic Systems supplies electronic records for large health care providers like the Cedars-Sinai Medical Center in Los Angeles, the Cleveland Clinic, and Johns Hopkins Medicinein Baltimore, as well as health plans like Kaiser Permanente and medical groups like the Weill Cornell Physicians Organization in New York. In fact, Epic’s reputation as a fun-filled, creative place to work helps draw programmers who might otherwise take jobs at Google, Microsoft or Facebook.

Epic supplies software, systems, training and support so its customers can manage their data. As far as the general public is concerned, it operates far under the radar. Yet it helps keep track of 40 million patients, alongside a handful of large software companies and hundreds of smaller firms that have emerged to digitize health records.

Unlike some of those firms, Epic is no newcomer. Judith Faulkner, the chief executive, started the company more than 30 years ago, when, in all but a very few places, patient records were kept on paper. As such, she has a long-term view of the nation’s struggle to digitize medical records.

Ms. Faulkner understands why it’s taken much longer for the health care industry than, say, banks and airlines to move to electronic data. In banking, the types of data are much more limited and known, she says. In health care, by contrast, data is constantly changing based on information from doctors, nurses, patients and others. New discoveries, protocols and government requirements add even more complexity.

The way this data is stored and used can literally be a matter of life and death — which is why the transition to electronic health records is so sensitive. And why it’s so important, Ms. Faulkner says. Computerized record systems can actively search for and analyze information in ways that paper files never can, thereby improving patients’ health, she says.

Digital records are an invaluable tool for doing research and improving care, says Philip Fasano, executive vice president and chief information officer of Kaiser Permanente. “For example, we are able to follow decades of data on diabetes patients,” he says. “We can see which medicines are absolutely the best and personalize the doses. We can truly change the medical outcomes.”

Ms. Faulkner started digitizing patient records when she was just out of graduate school in computer science at the University of Wisconsin. That’s when a research group in thepsychiatry department asked her to create a system to help keep track of patient data over time.

Her program, built on ideas from a few other pioneers, was a success. Other medical researchers began requesting their own versions, and eventually a business was born.

At first, Epic consisted of three part-time employees working at $10 used desks in the basement of an apartment house near the university. They bought a bulky computer from a company called Data General; it had two 50-megabyte disk drives that sounded like a noisy washing machine, Ms. Faulkner recalls. “You couldn’t touch it, or the data got messed up,” she says.

There may have been a learning curve, but “to the best of our knowledge, in the 32 years we’ve been in business, there has never been a breach of Epic’s data by a hacker,” Ms. Faulkner says — speaking to a concern that has some people nervous about the conversion to electronic health records.

Concerns about security are hardly groundless. A government Web site known as the “Wall of Shame” has documented hundreds of breaches that threatened patients’ privacy.

At Epic, “We have all sorts of firewalls and security systems in effect to prevent data breaches,” Ms. Faulkner says. On laptops used by doctors, files can be viewed but not stored. The same is true for smartphones and tablets. “We do not store patient data on them,” she says, so it cannot be misused if these devices are stolen.

Ms. Faulkner is an industry representative on a government panel charged with examining privacy and security issues regarding health data. She says she wants to strike a balance between ensuring privacy and making sure that information can be shared for better patient care.

“I’m worried if we put up too many barriers in order to make things private, and if that makes the flow of information slow and hard to share, in effect more people will be harmed,” she says. So far the committee has maintained that balance well, she says.

Carl Dvorak, an executive vice president at Epic, says the company shares patient data with health care organizations that are not customers if they meet certain conditions. They need “appropriate patient consent,” he says. “To ensure privacy and security each health care organization uses a digital certificate to prove their identity to other health care organizations when exchanging patient records.”

Another concern among patients and medical professionals is the possibility of medical errors resulting from improperly used or poorly designed record systems. Federal officials are exploring options for reporting and dealing with such problems. The industry prefers reporting voluntarily to a patient safety organization linked to the Department of Health and Human Services and its health information technology agency.

EPIC has had to consider these types of issues while growing very quickly. A decade ago, it was still a relatively small company, with 575 employees. Then, in 2003, Kaiser Permanente, based in California, chose Epic over two much larger companies — I.B.M. andCerner — to provide the electronic system for its 36 hospitals and more than eight million members.

Kaiser estimates it will eventually spend a total of $4 billion on the software and related costs like those for equipment and training employees.

Epic has been adding other large customers, for a total of 260, including 35 new contracts last year. All told, it says, its systems will cover 127 million patients with active electronic health records by July 2013. It now has 5,100 employees; to handle all that growth, it plans to hire 1,000 more people this year.

Its customers include many hospitals that are connected to medical schools, as well as large physician groups. The Epic software system is a “de facto standard among the more complex academic health centers and multispecialty medical groups,” says Dr. John D. Halamka, chief information officer of Beth Israel Deaconess Medical Center in Boston and a professor at the Harvard Medical School.

As a privately held, employee-owned company, Epic does not issue profit statements. Its revenue for 2011 is expected to come in at nearly $1.2 billion, a 45 percent increase over the previous year, the company says.

The federal government is contributing to the recent growth of Epic and similar firms by offering financial incentives to health providers who switch to electronic records. It sees these records as a way to improve patient care and reduce inappropriate costs like those for duplicated tests.

Nearly 40 percent of American primary care doctors and about 25 percent of hospitals use electronic patient records. Thousands more are expected to adopt them this year to qualify for financial help under the 2009 federal stimulus package.

The government began to disburse the money last May; so far, hospitals and doctors have received $2.5 billion of a potential $27 billion in stimulus funds, federal officials said last week.

In addition to Epic, other suppliers of health data systems include Allscripts, Meditech, Cerner and units of diversified giants like I.B.M., McKesson, Siemens and GE Healthcare. All of those companies’ varying systems have raised concerns about usability, especially when different systems must share information. Some wonder if the government should play a bigger role in creating uniform technical standards and designs across systems.

“So far the advisory committees that I am on have been wise in figuring out the right balance between what should be left to the vendors as they listen to their customers and what should be prescribed by the government,” Ms. Faulkner says.

About 250,000 doctors use Epic’s system, and “they give us a lot of feedback on design,” she says. “I haven’t seen an expert group that does better. Typically the wisdom of the crowd is better than direction from a small group.”

EPIC’S employees include doctors and nurses who visit customers’ sites to see what is and isn’t working. Last September, some 6,600 health care and information technology executives and professionals also visited the company’s bucolic campus here for a users’ conference.

The giant slide — one of the many quirky features of the campus — was a popular diversion during the conference.

“I never would have expected to see a bunch of executives going down a slide,” says Aaron Webb, 28, a software developer from St. Cloud, Minn., who has worked at Epic for six years.

Ms. Faulkner has made it a point to offer a “cool” workplace even though her company is distant from Pacific beaches or Manhattan towers. As part of an Epic committee, she has bought some of its eye-catching artwork at community art fairs around Wisconsin.

“It is an incredible physical facility,” says Marjorie Klein, a retired professor of psychiatry, original investor and longtime Epic board member. “I think it supports employee creativity.”

The campus also has 15 acres of solar electric panels, thousands of geothermal wells for heating, and crops that are harvested for biomass fuel.

Epic broke ground for the Verona campus in 2002 and began moving its main operations there from Madison in 2004. With the Kaiser contract in 2003 and the new business that followed, Epic has been expanding its acreage and adding buildings ever since. It now has 13 buildings and underground parking garages with 3.5 million square feet of space; a million more square feet is under construction.

That includes a sleek 5,000-square-foot data center — a far cry from the single computer in that basement in Madison that rattled like a washing machine three decades ago.

A version of this article appeared in print on January 15, 2012, on page BU1 of the New York edition with the headline: Digitizing Health Records, Before It Was Cool.

Lori Berenson returns to U.S. from Peru for holiday visit - latimes.com

2012-01-15T10:27:00.000-08:00

Lori Berenson returns to U.S. from Peru for holiday visit - latimes.com:

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Our Dog Copernicus Has His 10-Year Birthday Luncheon

2012-01-15T07:26:00.001-08:00

Copernicus Has His 10-Year Birthday Luncheon At The Distillery In Moss Beach, California

Sun 15 Jan 2012, 17:21 0 comment(s) Email article
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Yesterday was a magical and a beautiful winter day. We put the dogs in my car and drove to Moss Beach, California. this is a beautiful little community right on the Pacific Ocean. We decided that the dogs needed a walk before going to their birthday luncheon. We found a beautiful trail with some magical views. While Copernicus was off leash, he met a German Shepherd. Things were friendly at first. Then the two dogs got into a fight. We had to put Copernicus back on leash.

We took the dogs to the Distillery Restaurant. It was opened some 80 years ago. During the Great Depression it was a place where people could get illegal alcohol. It was also a hang out for gangsters. It's now a very nice restaurant. It's also dog friendly with a lower-level patio devoted just to dogs and their human companions.

We had to sit on plastic chairs and endure some rough conditions. I had to go up and order the food and drinks and bring much of it down. Despite these hardships, it was a beautiful afternoon with incredible views. The patio was full of other dog lovers. I had fish and chips and Elena had steak. we shared a Cesar salad. The dogs had a small portion of the same steak that Elena had. Our dog Copernicus ate his part of the steak and then ate the remainder of the Cesar salad. Our dog Cassiopeia at her part of the steak and the the rest of the fruit on Elena's plate. We both got color in our skin due to the sun. We met some interesting people including a lady from Colombia.

We put the dogs back in the car and then went inside to wach the New Orleans Saints play the San Francisco 49'ers. It was the best football game that I had seen in several decades. I warned Elena that the 49'ers do their best work in the last couple of minutes of a football game. They were true to form and made a touch down with 9 seconds left to win 36-32, We watched a glorious sunset.

This was amagical celebration of ten years of life for Copernicus. It was a celebration of his love and devotion to us for a decade. It was a magical day with magical memories that we will treasure always.The people at the Distillery Restaurant were wonderful hosts.

Copernicus And Cassiopeia At The Birthday Luncheon

2012-01-15T06:34:00.000-08:00

Copernicu's Birthday Luncheon

2012-01-14T09:59:00.000-08:00

Elena goes for her teeth cleaning with Dr. Choi in a few minutes. Then we will go to Montara for lunch at the Distillery. This restaurant has a special lower level where one can eat with their dogs. We are taking Copernicus for this birthday luncheon. He will get a hamburger with no onions. I assure all Facebook friends that he will get no alcoholic beverages!!!

The Discovery Enterprise: High Tech Hitler

2012-01-14T07:43:00.000-08:00

The Discovery Enterprise: High Tech Hitler:

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Agenda with George Friedman and Nate Hughes on Iran - YouTube

2012-01-13T09:37:00.000-08:00

Agenda with George Friedman and Nate Hughes on Iran - YouTube:

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Foreclosures expected to rise, pushing home prices lower - latimes.com

2012-01-13T04:13:00.000-08:00

Foreclosures expected to rise, pushing home prices lower - latimes.com:

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Budget Cuts Hamper I.R.S. From Performing Its Duties, Report Says - NYTimes.com

2012-01-13T03:41:00.000-08:00

Budget Cuts Hamper I.R.S. From Performing Its Duties, Report Says - NYTimes.com:

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Genocide: Rwandan deportation delayed | News24

2012-01-13T03:27:00.000-08:00

Genocide: Rwandan deportation delayed | News24:

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Olivia Munn-Jack;s Beautiful Woman For Friday 13 January,2011

2012-01-13T03:13:00.001-08:00

Did Death Row Inmate Linda Carty Get a Fair Trial? - The Texas Observer

2012-01-12T15:05:00.000-08:00

Did Death Row Inmate Linda Carty Get a Fair Trial? - The Texas Observer:

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The High Cost of Government Waste — The American Magazine

2012-01-12T11:02:00.000-08:00

The High Cost of Government Waste — The American Magazine:

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Michael Olenick: 9.8 Million Shadow Inventory Says Housing Market is a Long Way From the Bottom « naked capitalism

2012-01-12T10:30:00.000-08:00

Michael Olenick: 9.8 Million Shadow Inventory Says Housing Market is a Long Way From the Bottom « naked capitalism:

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SA, Cuba cement defence ties

2012-01-12T07:06:00.000-08:00

SA, Cuba cement defence ties:

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What We All Can Learn From How Doctors Choose To Die

2012-01-12T06:59:00.001-08:00

What We Can Learn From How Doctors Choose to Die (January 11, 2012)

We can understand the systemic flaws in the U.S. "healthcare"/sickcare system by examining how doctors choose to die, which is quite different from the experience of their patients.Explaining how the U.S. "healthcare" complex is actually a sickcare system is a major theme of this site. Promoting health via lifestyle, diet and fitness is essentially profitless (the equivalent of selling raw carrots) while treating illness, especially chronic illness, is immensely profitable (the equivalent of selling burgers, fries and soda).
The U.S. sickcare system is a partnership of private-sector cartels and the Central State, which diverts 18% of the national income to the cartels.
Sickcare has a wealth of perverse consequences, including "defensive medicine" practiced to avoid malpractice lawsuits, unneeded care provided to increase profit margins, unnecessary procedures and tests, dangerous medications of limited efficacy, massive systemic fraud in the government sickcare programs, and on and on.
But perhaps the most perverse consequence is the needless suffering the system imposes on its patients under the guiding principle of "doing everything we can to prolong your life."
If I had to describe the core beliefs that power oftwominds.com, one would be that health is ultimately the only true wealth, and that roughly 2/3 of our health is in our hands-- the other third being heredity and environmental factors outside our influence. Any situation in which we control 2/3 of the outcome is significant, as many situations in life only allow a limited response to events outside our influence.
Despite this extremely meaningful level of influence, few people actively seek to improve their health until they experience a "wake-up call" such as cancer or a near-death encounter via a heart attack. Waiting until one's health is already severely compromised before taking action invites a negative outcome, but even this "obvious" reality does not persuade people to start consistently doing all the things we're constantly hectored to do: lose weight, start exercising, etc.
It is remarkable how vulnerable we are to faddish "easy fixes" (drinking coconut water being one of the latest incarnations of the fad fix) and how resistant we are to the one proven "miracle cure": exercise.
Given my focus on health and the perverse sickcare system, I read the following article with deep interest. I am indebted to longtime correspondent Joel M. for forwarding it to me: How Doctors Die by Ken Murray M.D.

"Years ago, Charlie, a highly respected orthopedist and a mentor of mine, found a lump in his stomach. He had a surgeon explore the area, and the diagnosis was pancreatic cancer. This surgeon was one of the best in the country. He had even invented a new procedure for this exact cancer that could triple a patient’s five-year-survival odds—from 5 percent to 15 percent—albeit with a poor quality of life. Charlie was uninterested. He went home the next day, closed his practice, and never set foot in a hospital again. He focused on spending time with family and feeling as good as possible. Several months later, he died at home. He got no chemotherapy, radiation, or surgical treatment. Medicare didn’t spend much on him.It’s not a frequent topic of discussion, but doctors die, too. And they don’t die like the rest of us. What’s unusual about them is not how much treatment they get compared to most Americans, but how little. For all the time they spend fending off the deaths of others, they tend to be fairly serene when faced with death themselves. They know exactly what is going to happen, they know the choices, and they generally have access to any sort of medical care they could want. But they go gently."

I sent this to longtime correspondent Dr. "Ishabaka" (a U.S. physician with decades of experience) and his response is revealing:

"That is the best article I have read in a long time, and I AGREE WITH EVERY SINGLE WORD. I have a living will and an advanced health care directive. There's a bright red card in my wallet with this on it (if you come in the ER unconscious or confused your wallet gets checked). I've told my wife that if I'm badly injured in a car crash but can be fixed up, to have me admitted to the ICU and tortured (the ICU is really a torture chamber). If I have terminal cancer, I would refuse chemotherapy for all but a few types that respond well to it (most don't). I want to stay a home, with a hospice nurse if necessary, and die in my bed.By the way, the Feds passed a law saying doctors HAVE to do everything if the patient is mentally incapable of deciding for themselves, unless the patient has a living will, advanced health care directive - or a family member or other adult appointed as legal guardian (which will NOT be the case in the example the author gave - sudden unconsciousness due to massive stroke). This was done during my career. I used to be able to have a sit-down with the family and decide whether or not to "do everything" when, say, someone with documented terminal cancer came in with some near-death condition and was "out of it".
Now, that's illegal, and I could get into enormous trouble - it's insane! Here is exactly what could have been done to me: a $50,000 fine and loss of the ability to bill Medicare for five years. As an emergency physician that would have put me out of business, as Medicare is one of the main sources of income for emergency physicians."

I think these accounts make it clear that each of us has a responsibility to our families to get a living will or advanced health care directive, and make sure those close to us know about it and where to find it. We also need to make sure our elderly loved ones have stipulated their wishes, and that we know where these documents are located. Otherwise, what happens to them in a medical emergency is out of our hands.
Amongst the thousands of emails I receive annually, a handful mention that the site provided some inspiration and/or information on improving diet and fitness and on sustainably losing weight. For example, a longtime reader recently mentioned losing 30 pounds after reading these articles I posted in 2010 (via correspondent Ken R.) by a physicist on gluttony and weight loss:
The Physics Diet
On Gluttony
Basically, it comes down to eating less, eating better food, building/maintaining muscle mass and doing some aerobic exercise that gets your respiratory rate up. That's it. Nothing fancy.
Humans are famously inept at long-term planning, as that skill offers limited selective advantages in a hunter-gatherer lifestyle where food is gathered daily and the group often traveled daily. Thus is is "natural" to continue living at 50 the same way we lived at 25, when our bodies could tolerate excess and poor fitness.
It is also tempting to focus on the 1/3 of our health we don't directly control and become passive about what happens to us.
I view eating real food and daily stretching and exercise as "paying myself first," the idea that one saves money/accumulates capital by paying oneself first and then paying the rest of one's obligations. The typical American household pays all their bills and fulfills their gratifications and intends to save what's left. Alas, there is rarely much left when you "pay yourself last." In the same way, people pay themselves last in fitness and eating better, too, with the same results--nothing changes sustainably.
This is not an abstract topic in my view, as I anticipate the sickcare system devolving in the decade ahead. Since this site has many correspondents who are doctors and nurses, I know how close many care providers are to walking away from this sick system. The average patient has no idea of the burdens and risks carried by many care providers; they only hear about the big salaries. But the system is dangerously close to breaking the will and spirit of those tasked with operating within it. If you think this is far-fetched, you don't know many practicing doctors and nurses.
I think it highly likely we will need cash to get care, and various elements of care may be scarce at any price. Cash (or equivalents) may well be king, but no amount of money can restore health once it has been lost or squandered. In pondering the end of life, hopefully we can draw inspiration to change our lives, diet and fitness in the here and now to preserve and improve what health we currently possess.

If this recession strikes you as different from previous downturns, you might be interested in my new book An Unconventional Guide to Investing in Troubled Times (print edition) or Kindle ebook format. You can read the ebook on any computer, smart phone, iPad, etc.Click here for links to Kindle apps and Chapter One. The solution in one word: Localism.

Readers forum: DailyJava.net.

Order Survival+: Structuring Prosperity for Yourself and the Nation (free bits) (Kindle) orSurvival+ The Primer (Kindle) or Weblogs & New Media: Marketing in Crisis (free bits)(Kindle) or from your local bookseller.
Of Two Minds Kindle edition: Of Two Minds blog-Kindle

"This guy is THE leading visionary on reality. He routinely discusses things which no one else has talked about, yet, turn out to be quite relevant months later."
--Walt Howard, commenting about CHS on another blog.
NOTE: contributions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Mish's Global Economic Trend Analysis: China Snubs Geithner on Iran Oil; China Gets Cheaper Iran Oil as U.S. Pays Tab for Hormuz Patrols; Retired Admiral Warns "US Policy Benefits the Chinese"

2012-01-12T06:41:00.000-08:00

Mish's Global Economic Trend Analysis: China Snubs Geithner on Iran Oil; China Gets Cheaper Iran Oil as U.S. Pays Tab for Hormuz Patrols; Retired Admiral Warns "US Policy Benefits the Chinese":

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Iran Says Israel Behind The Assassination Of Iranian Nuclear Scientist

2012-01-12T05:26:00.001-08:00

By Ramin Mostafavi

TEHRAN, Jan 11 (Reuters) - An Iranian nuclear scientist was blown up in his car by a motorbike hitman on Wednesday, prompting Tehran to blame Israeli and U.S. agents but insist the killing would not derail a nuclear programme that has raised fears of war and threatened world oil supplies.

The fifth daylight attack on technical experts in two years, the killer's magnetic bomb delivered a targeted blast to the door of 32-year-old Mostafa Ahmadi-Roshan's silver sedan as he drove down a busy street close to Tehran University during the morning rush hour. The chemical engineer's passenger also died, Iranian media said, while a passer-by was slightly hurt.

Israel, whose military chief had warned Iran only on Tuesday to expect more mysterious mishaps, declined to comment. While many analysts saw Israeli or Western involvement as eminently plausible, the role of local or other Middle Eastern hands in a deadly shadow war of bluff and sabotage could not be ruled out.

The killing, which left debris hanging in trees and body parts on the road, came in a week of heightened tension:

Iran has started an underground uranium enrichment plant and sentenced an American to death for spying; Washington and Europe have stepped up efforts to cripple Iran's oil exports for its refusal to halt work that the West says betrays an ambition to build nuclear weapons, not the power plants Iran claims.

Iran has threatened to choke the West's supply of Gulf oil, drawing a U.S. warning that its navy was ready to open fire to prevent any blockade of the strategic Strait of Hormuz.

However, analysts saw the latest assassination, which would have taken some preparation, as part of a longer-running, cover effort to thwart Iran's nuclear development programme that has also included suspected computer viruses and mystery explosions.

While fears of war have forced up oil prices, the region has seen periods of sabre-rattling and limited bloodshed before without reaching all-out conflict. However, a willingness in Israel, which sees an imminent Iranian atom bomb as a threat to its existence, to attack Iranian nuclear sites, with or without U.S. backing, has heightened the sense that a crisis is coming.

"HEINOUS ACT"

Iran's Atomic Energy Organisation, which has failed to persuade the West that its quest for nuclear power has no hidden military goal, said the killing of Ahmadi-Roshan would not deter it: "We will continue our path without any doubt ... Our path is irreversible," it said in a statement carried on television.

"The heinous acts of America and the criminal Zionist regime will not disrupt our glorious path ... The more you kill us, the more our nation will awake."

First Vice-President Mohammad Reza Rahimi, quoted by IRNA news agency, said: "Iran's enemies should know they cannot prevent Iran's progress by carrying out such terrorist acts."

Preparing for its first national election since a disputed presidential vote in 2009 brought street protests against 30 years of clerical rule, Iran's leaders are struggling to contain internal tensions. Defiance of Israel and Western powers plays well with many voters in the nation of 76 million.

Israel, whose Mossad intelligence agency has a history of covert killings abroad, declined comment on Wednesday's bombing.

On Tuesday, armed forces chief Lieutenant-General Benny Gantz was quoted as telling members of parliament: "For Iran, 2012 is a critical year in combining the continuation of its nuclearisation, internal changes in the Iranian leadership, continuing and growing pressure from the international community and things which take place in an unnatural manner."

There was no immediate reaction to the early morning attack from the United States. Its ally Britain, whose Tehran embassy was ransacked in November, called suggestions of London's involvement "baseless" and condemned the killing of civilians.

MOTORCYCLE HITMAN

The attack nonetheless, bore some of the hallmarks of the work of sophisticated intelligence agencies capable of circumventing Iran's own extensive security apparatus and also showing some apparent care to limit the harm to passers-by.

While witnesses spoke of a frighteningly loud explosion at 8:20 a.m. (0450 GMT) and parts of the Peugeot 405 sedan ended up in the branches of the trees lining Gol Nabi Street, much of the car was left intact. The containment of the blast to the vehicle suggested a charge designed both to be sure of killing the occupants but also to limit serious injury to those targeted.

Witnesses said a motorcycle, from which the rear pillion passenger reached out to stick the device to the side of the car, made off into the heavy commuter traffic.

Though the scientist killed -- the fourth in five such attacks since January 2010 -- was only 32, Iranian media described him as having a senior role at the uranium enrichment plant at Natanz, near Tehran. The semi-official news agency Mehr said Ahmadi-Roshan had recently met officials of the U.N. nuclear watchdog, the International Atomic Energy Agency.

IAEA officials could not confirm that, however.

Analysts say that killing individual scientists -- especially those whose lack of personal protection suggests a relatively junior role -- is unlikely to have much direct impact on Iran's nuclear programme, which Western governments allege is seeking to enrich enough uranium highly enough to let it build weapons.

COVERT WAR

Sabotage -- like mysterious reported explosions at military facilities or the Stuxnet computer virus widely suspected to have been deployed by Israel and the United States to disrupt nuclear facilities in 2010 -- may have had more direct effects.

However, assassinations may be intended to discourage Iranians with nuclear expertise from working on the programme.

Bruno Tertrais from France's Strategic Research Foundation said: "It certainly has a psychological effect on scientists working on the nuclear programme."

He cautioned, however, against assuming that Israel the United States or both were the instigators of the latest attack.

Trita Parsi, a U.S.-based expert on Iran, said the killing might, along with the heightened rhetoric of recent weeks, be part of a pattern ahead of a possible resumption of diplomatic negotiations on Iran's nuclear programme; some parties may want to improve their bargaining position, some may even see violence as a way of thwarting negotiations altogether, Parsi said.

Last month, Iran signalled a willingness to return to a negotiating process which stalled a year ago, though Western officials say a new round of talks is far from certain yet.

Iranian Foreign Ministry spokesman Ramin Mehmanparast was quoted by ISNA news agency as calling on the IAEA and other world bodies to condemn the latest killing: "If international bodies, in particular the IAEA, do not adopt a clear stance against this kind of assassination ... then they are supporting this act with their silence and should be held accountable."

The IAEA, which inspects Iranian nuclear sites including Natanz, declined to comment on the assassination, which comes ahead of an expected visit by a senior team of the Vienna-based agency to Tehran to discuss its growing concerns about suspected weapons-relevant activities in the Islamic Republic.

An IAEA official said on Monday that the team was expected in Iran "quite soon".

SANCTIONS CAMPAIGN

Iran's decision to carry out enrichment work deep underground at Fordow, near the holy city of Qom, could make it harder for U.S. or Israeli forces to carry out veiled threats to use force against Iranian nuclear facilities. The move to Fordow could narrow a time window for diplomacy to avert any attack.

The announcement on Monday that enrichment -- a necessary step to make uranium into nuclear weapons -- had begun at Fordow has given added impetus to Western efforts to impose an oil export embargo intended to pressure Tehran to negotiate a halt.

Oil prices have firmed. Brent crude is up more than 5 percent so far this year to above $113 a barrel.

The European Union on Tuesday brought forward to Jan. 23 a ministerial meeting that is likely to confirm an embargo on oil purchases. Big importers of Iranian oil are moving to secure alternative supplies away from OPEC's second biggest exporter.

Almost exactly two years ago, on Jan. 12, 2010, physics lecturer Masoud Ali Mohammadi was killed by a remote-controlled bomb attached to a motorcycle in Tehran. In November of that year, two daylight bomb attacks on the same day in Tehran killed one nuclear scientist and wounded another. A physics lecturer was shot dead in an attack in Tehran in July last year.

Despite public infighting within the Iranian establishment, Supreme Leader Ayatollah Ali Khamenei issued a clear statement on Monday that Iran had no intention of changing its nuclear course because of tightened foreign sanctions.

New U.S. sanctions have started to bite. The rial currency has lost 20 percent of its value against the dollar in the past week and Iran has threatened to shut the exit from the Gulf at the Strait of Hormuz, through which 35 percent of the world's seaborne traded oil passes.

U.S. Treasury Secretary Timothy Geithner, visiting Beijing, appealed for Chinese cooperation on nuclear non-proliferation, though Chinese officials made clear that they still opposed the U.S. sanctions and would go on buying Iranian oil.

Russia, too, came out against the U.S.-led oil embargo.

U.S. Secretary of State Hillary Clinton said Iran's move to enrich uranium near the city of Qom was "especially troubling".

"This step once again demonstrates the Iranian regime's blatant disregard for its responsibilities and that the country's growing isolation is self-inflicted," she said.

Stepping up pressure on Tehran, U.S. President Barack Obama approved a law on New Year's Eve that will sanction financial institutions dealing with Iran's central bank, a move that makes it difficult for consumers to pay for Iranian oil.

Geithner is in Asia this week to drum up support for Washington's efforts to stem the oil revenues flowing to Tehran.

After Beijing, Geithner may have an easier task in U.S. ally Japan, the next stop of his tour on Thursday, where a government source has said Tokyo will consider cutting back its Iranian oil purchases to secure a waiver from new U.S. sanctions.

Japan has already asked OPEC producers Saudi Arabia and the United Arab Emirates to supply it with more oil. South Korea is also considering alternative supplies. (Additional reporting by Parisa Hafezi and Mitra Amiri in Tehran, Allyn Fisher-Ilan in Israel, Fredrik Dahl in Vienna, Lucy Hornby in Beijing and Andrew Quinn in Washington; Writing by Parisa Hafezi and Alastair Macdonald,; Editing by Peter Millership)

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Marine’s Unusual Résumé May Have Attracted Iran’s Suspicion - NYTimes.com

2012-01-11T16:21:00.000-08:00

Marine’s Unusual Résumé May Have Attracted Iran’s Suspicion - NYTimes.com:

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Ozzie & Harriet Sing

2012-01-11T15:49:00.000-08:00

Ozzie Nelson & His Orchestra - 1943 set

2012-01-11T15:40:00.000-08:00

Harriet David Rick Nelson Interview 1981

2012-01-11T15:33:00.000-08:00

Jack's Beautiful Woman For Wednesday 11 January, 2012

2012-01-11T07:12:00.003-08:00

Want to pursue the American Dream? Move to Canada or Europe! — RT

2012-01-10T16:27:00.000-08:00

Want to pursue the American Dream? Move to Canada or Europe! — RT:

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Housing market blooms in Cuban provinces | Reuters

2012-01-10T16:21:00.000-08:00

Housing market blooms in Cuban provinces | Reuters:

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Want to pursue the American Dream? Move to Canada or Europe! — RT

2012-01-10T15:27:00.000-08:00

Want to pursue the American Dream? Move to Canada or Europe! — RT:

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Boldly going to the wild frontier - Telegraph

2012-01-10T11:21:00.000-08:00

Boldly going to the wild frontier - Telegraph:

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Space tourism: the Moon, Mars and beyond?

2012-01-10T11:20:00.000-08:00

Space tourism: the Moon, Mars and beyond?:

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Machine to read individual’s DNA for $1,000 - FT.com

2012-01-10T10:42:00.000-08:00

Machine to read individual’s DNA for $1,000 - FT.com:

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Our Dog Copernicus Celebrates Birthday #10

2012-01-10T08:22:00.000-08:00

Dear Candace:

Please tell Alice and the boys that Copernicus is making 10 years today! He's an amazing little man. He was conceived in Argentina in a poor slum. His father was a cute little dog about Alice' size named Virgilio. His mother Eloisa had to stay with a friend of Elena's while we found a house where we could have a pet. Eloisa had one litter of puppies. The husband of Elena's friend drowned the puppies because they did not have the money to feed them. (To this day it makes me mad to think about such a thing. We could have sent them money for food.) Eloisa recovered from that loss and got pregnant again with little Virgilio. Elena came down to Argentina to pick her up after the 9-11 attack. It was a huge hassle and cost $800.00. We wanted to bring Virgilio also. But he had disappeared.

Eloisa flew from Buenos Aires to Miami and then onto San Francisco. She spent some 24 hours in a crate. She was relieved to see us when we picked up the crate. I had to go over to customs and present her full shot record to get her admitted to the USA. I got a nice man in customs who looked at the papers for a second, smiled and stamped everything approved. When Eloisa got to the car, her nose went high into the air. She knew that she was in a strange and different place.

We soon discovered that Eloisa was pregnant. She went into labor after dinner when Khossrow Assadi was staying with us. Copernicus was the first born. As a young puppy he was very sweet. He would spend long hours at night looking up at the sky and stars. It reminded us of the astronomer Nicholas Copernicus. We named him Copernicus.

He has been our loving companion and guard dog for the last ten years. He is also a man who has been in many fights with other animals and has bitten several humans. He has attacked large trucks and gone on marathon escapes that lasted for hours. He has never suffered a major injury.

I would use the saying from the Rocky movies that described Sylvester Stallone (Rocky):

"His whole life was a million to one shot!"

One Picture Says It All-The Credit Card Trap

2012-01-10T07:45:00.001-08:00

Global Warming?

2012-01-08T18:31:00.001-08:00

It was such a beautiful day. I couldn't believe that we are in the "dead of winter." It felt like a beautiful summer day. Elena believes that it's the onset of global warming. She wants to be alive long enough to enjoy these days but be passed away when the horrors like rising oceans and new desserts haunt the world. Gee I agree that global warming is a problem. But I think it will be much more gradual in its onset and we can still stop it. I think we are just having a strange weather pattern.

Iran, Israel and US plan Gulf exercises - FT.com

2012-01-07T19:22:00.000-08:00

Iran, Israel and US plan Gulf exercises - FT.com:

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A Beautiful And Wonderful Day In The Bay

2012-01-07T16:02:00.001-08:00

It's a beautiful winter day here. Elena and I went for a nice morning hike along the Bay Trail that covers a lot of San Francisco Bay. We had a nice lunch at El Torito. We then took Cassiopeia for her last Parvo shot and her first rabies shot. The place was packed. We then went out and looked at birds and relaxed.

An Attempted Fraud

2012-01-07T07:16:00.001-08:00

I just realized that a man I had worked with for almost 9 years tried to defraud me out of $25,000. My father always said the following:
"Don't worry about your enemies. You always know exactly who they are and what they are up to. It's your friends and your relatives. Those are the ones who will do it to you every time."

Mobile telephony: Difference engine: End of the landline? | The Economist

2012-01-07T06:55:00.000-08:00

Mobile telephony: Difference engine: End of the landline? | The Economist:

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Jack's Pearl Of Wisdom For Saturday 7 January

2012-01-07T06:49:00.001-08:00

Love Quote: girly-girl-graphics

The Discovery Enterprise: The Dark Ages

2012-01-06T10:30:00.000-08:00

The Discovery Enterprise: The Dark Ages:

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Elisa Sednaoui-Jack's Beautiful Woman For Friday 6 Janaury

2012-01-06T05:04:00.001-08:00

charles hugh smith-Want to Put Iran Out of Business? Here's How

2012-01-06T04:41:00.000-08:00

charles hugh smith-Want to Put Iran Out of Business? Here's How:

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Buzz Aldrin: American Space Exploration Leadership -- Why and How

2012-01-05T17:15:00.000-08:00

Buzz Aldrin: American Space Exploration Leadership -- Why and How:

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A World With Too Much Debt

2012-01-01T16:21:00.003-08:00

A World with Too Much Debt
Total debt-to-GDP levels in the 18 core countries of the Organisation for Economic Co-operation and Development (OECD) rose from 160 percent in 1980 to 321 percent in 2010. Disaggregated and adjusted for inflation, these numbers mean that the debt of nonfinancial corporations increased by 300 percent, the debt of governments increased by 425 percent, and the debt of private households increased by 600 percent. But the costs of the West’s aging populations are hidden in the official reporting. If we included the mounting costs of providing for the elderly, the debt level of most governments would be significantly higher. (See Exhibit 1.)

Add to this sobering picture the fact that the financial system is running at unprecedented leverage levels, and we can draw only one conclusion: the 30-year credit boom has run its course. The debt problem simply has to be addressed. There are four approaches to dealing with too much debt: saving and paying back, growing faster, debt restructuring and write-offs, and creating inflation.
Saving and Paying Back. Could the West simply start saving and paying back its debt? If too many debtors pursued this path at the same time, the ensuing reduction in consumption would lead to lower growth, higher unemployment, and correspondingly less income, making it more difficult for other debtors to save and pay back. This phenomenon, described by Irving Fisher in 1933 in The Debt-Deflation Theory of Great Depressions, can result in a deep and long recession, combined with falling prices (deflation). This is amplified when governments simultaneously pursue austerity policies—such as we see today in many European countries and will see in the U.S. beginning in 2012. A reduction in government spending by 1 percent of GDP leads to a reduction in consumption (within two years) of 0.75 percent and a reduction in economic growth of 0.62 percent. Saving (or, more correctly, deleveraging) will reduce growth, potentially trigger recession, and drive higher debt-to-GDP ratios—not lower debt levels. Indeed, during the early years of the Great Depression, President Hoover—convinced that a balanced federal budget was crucial to restoring business confidence—cut government spending and raised taxes. In the face of a crashing economy, this only served to reduce consumer demand.

For the private sector and government to reduce debt simultaneously would require running a trade surplus. So long as surplus countries (China, Japan, and Germany) pursue export-led growth, it will be impossible for debtor countries to deleverage. Martin Wolf put it trenchantly in the Financial Times: “The Earth cannot, after all, hope to run current account surpluses with the people of Mars.” The lack of international cooperation to rebalance trade flows is a key reason for continued economic difficulties.
Saving and paying back cannot work for 41 percent of the world economy at the same time. The emerging markets would have to import significantly more, which is unlikely to happen.
Growing Faster. The best option for improving woeful debt-to-GDP ratios is to grow GDP fast. Historically, this has rarely been achieved, although it can be done—for example, in the U.K. after the Napoleonic Wars and in Indonesia after the 1997/1998 Asia crisis (although Indonesian debt levels were nowhere near contemporary highs in the West). Attacking today’s debt mountain would require reforming labor markets or investing more in capital stock. Neither is happening.
Politicians are unwilling to interfere in labor markets given today’s elevated levels of unemployment. Moreover, empirical evidence shows that the initial impact of such reforms is negative, as job insecurity breeds lower consumption.
Companies can afford to invest significantly more, as they are highly profitable. The share of U.S. corporate profits in relation to U.S. GDP is at an all-time high of 13 percent (as are cash holdings), yet corporate real net investment (that is, investment less depreciation) in capital stock in the third quarter of 2011 was back to 1975 levels. But companies are reluctant to invest while demand is sluggish, while existing capacities are sufficient, and while the outlook for the world economy remains highly uncertain.
The aging of Western societies will be a further drag on economic growth. By 2020, the workforce in Western Europe will shrink 2.4 percent, with that of Germany shrinking 4.2 percent.
The inability to grow out of the problem is bad news for debtors. Look at Italy, for example: Italian government debt is 120 percent of GDP. The current interest rate for new issues of ten-year bonds is 7 percent—up from 4.7 percent in April 2011. If Italy had to pay 6 percent interest on its outstanding debt, such a high rate would materially increase the primary surplus (that is, the current account surplus before interest expense) that Italy would need to run in order to stabilize its debt level. If we assume that Italy’s economy grows at a nominal rate of 2 percent per year, the government would need to run a primary surplus of 4.8 percent of GDP (calculated as 6 percent interest incurred on its debt minus 2 percent nominal growth multiplied by 120 percent debt to GDP) just to stabilize debt-to-GDP levels; the latest forecasts show only a 0.5 percent surplus for 2011. Any effort to increase the primary surplus through austerity and tax increases runs the risk of creating a downward spiral. When investors start doubting the ability of the debtor to serve its obligations, interest rates rise even further, leading to a vicious circle of austerity, lower growth, and rising interest rates.
Debt in itself makes it more difficult to grow out of debt. Studies by Carmen Reinhardt and Kenneth Rogoff and the Bank for International Settlements show that once government debt reaches 90 percent of GDP, the real rate of economic growth is reduced. This also applies to the debt of nonfinancial corporations and private households. Exhibit 2 shows the current debt level of key economies by sector. In all countries, the debt level of at least one sector is beyond the critical mark. Somewhat perversely, only in Greece are the two private sectors below the threshold. And only in Germany and Italy (in addition to Greece) do private households have a debt level below 70 percent of GDP.

[Note: For those not familiar, the flags represent the US, Japan, Germany, France, Britain, Portugal, Italy, Ireland, Greece, and Spain, in order. – JM.]

Debt Restructuring and Write-Offs

We explored this option in our last paper (Back to Mesopotamia: The Looming Threat of Debt Restructuring, BCG Focus, September 2011). Assuming a combined sustainable debt level of 180 percent of GDP for private households, nonfinancial corporations, and governments, we estimated the debt overhang to be €6 trillion for the euro zone and $11 trillion for the U.S. We argued that (some) governments might be tempted to fund this through a one-time wealth tax of 20 to 30 percent on all financial assets.
The target level of 180 percent can be debated (and was debated by many readers of Back to Mesopotamia), but a level of 220 percent would still imply a debt restructuring of $4 trillion in the U.S. and €2.6 trillion in the euro zone, leading to a one-time wealth tax of 12 percent and 14 percent, respectively. Given the unpopularity of such a tax, we are likely to see less incendiary taxes imposed. This means that politicians must resort to the last option: inflation.
Inflation. Another option to reduce Western debt loads would be financial repression—a situation in which the nominal interest rate is below the nominal growth rate of the economy for a sustained period of time. After World War II, the U.S. and the U.K. successfully used inflation to reduce overall debt levels. In spite of today’s low-interest-rate environment, we have the opposite situation: interest rates are higher than economic growth rates. As risk aversion in financial markets increases and a new recession in 2012 looms large, the problem could get even worse.
So the only way to achieve higher nominal growth will be to generate higher inflation. Aggressive monetary easing has barely moved the inflation needle in the U.S. and most of Europe, although the impact on U.K. inflation has been greater. Inflation is not being generated, because the expectation of inflation remains low and because there is still overcapacity and overindebtedness in the private and public sectors. Continued monetary easing could (and will) lead to a substantial monetary overhang that could, if the public loses trust in money, lead to an inflationary bubble. Some argue that inflation is unlikely because of the oversupply of labor and continued competition from new market entrants like China. Certainly we may see continued pressure on wages because of globalization, although the longer low growth persists in the West, the more likely it is that Western governments will resort to increased protectionism, leading to upward pressure on prices. Moreover, some observers believe that the inflation indicators do not give a true reading of the underlying rates of inflation.
It is also a matter of trust. Take, for example, the history of hyperinflation in Germany in the early 1920s. The German Reichsbank funded the government with newly printed money for several years without causing inflation. But once the public lost trust in money, people started to spend it fast. This led to higher demand and an inflationary spiral.Today the velocity of money in the U.S. is at an all-time low of 5.7. If the number of times a dollar circulates per year to make purchases returned to the long-term average of 17.7, price levels in the U.S. would rise by 294 percent over that period—unless the Federal Reserve simultaneously reduced its balance sheet by $1.8 trillion. Some inflation is probably attractive to those seeking to reduce debt levels. The problem is stopping the inflation genie once it has left the bottle.
There are no easy solutions to the debt problem. At best, we expect a sustained period of low growth in the West. Even this would require the following:
A coordinated effort to rebalance global trade flows, which would require the emerging markets, Germany, and Japan to import more, thereby allowing the debtor countries to earn the funds necessary to deleverage
Stabilizing the overstretched financial sector through recapitalization and slow de-risking and deleveraging—in contrast to today’s new rules, which encourage banks to shrink their balance sheets rather than finance commercial activity (it is worth noting that the effect of monetary easing during a period when ultra-low interest rates are below the rate of inflation is essentially to provide additional support to the banking system through the provision of low-cost liquidity)
Reducing excessive debt levels, ideally through an orderly restructuring or higher inflation
Current policies fall short against all these criteria. The coordinated intervention of several global central banks on November 30 could be construed as a positive sign of global cooperation, given that the whole world fears the implications of a (disorderly) breakup of the euro zone. In reality, it was once again merely a case of pulling the only lever left—that of printing money—and so did not address the one fundamental problem facing the world economy. Even China’s participation reflected its worries about its biggest export market (Europe) and the risk of another (possibly deep) recession more than a true willingness to support the West by rebalancing trade flows.
Any new recession, given growing and unsustainable debt levels, would increase the risk of short-term defaults and significantly increase the medium-term risk of higher inflation. Companies should therefore prepare for these scenarios. But they also need to consider how the situation in Europe could amplify the problem.

Off-Duty A.T.F. Officer Is Killed After Robbery of Long Island Pharmacy - NYTimes.com

2012-01-01T04:15:00.000-08:00

Off-Duty A.T.F. Officer Is Killed After Robbery of Long Island Pharmacy - NYTimes.com:

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Mish's Global Economic Trend Analysis: Additional 2012 Predictions: Trade Wars, US Election, Precious Metals, Energy

2011-12-31T10:48:00.000-08:00

Mish's Global Economic Trend Analysis: Additional 2012 Predictions: Trade Wars, US Election, Precious Metals, Energy:

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