CHINA JOINS GREECE IN RECESSION: THE WORLD IN THE 1930’S AGAIN?

 

 

 

CHINA JOINS GREECE IN RECESSION: THE WORLD IN THE 1930’s AGAIN?

   

Think Greece's economy is the one in trouble? It's CHINA that's facing financial meltdown and the biggest stock market crash since the Great Depression Nearly $3trillion wiped off Chinese stock markets in just the last few weeks Government and investors launched campaign to prop up tumbling shares Booming stock markets had more than doubled in the year to mid-June Experts draw parallels with the credit booms that led up to the 1929 crash Analyst: 'I've never seen this kind of slump before. Don't think anyone has' China's tumbling stock markets plunged even further today, intensifying fears the country was tail-spinning towards the biggest financial disaster since the 1929 Wall Street crash. Almost $3trillion (£2trn) – more than the entire economic output of Brazil – has been wiped out since markets went into reverse just a few weeks ago, posing a bigger headache for many global investors than even the Greek debt crisis. China's government, regulators and financial institutions are now waging a concerted campaign to prop up the nation's stock markets – a move that failed spectacularly in the 1929 crash that triggered the Great Depression. The plunge in its previously booming stock markets, which had more than doubled in the year to mid-June, is a major problem for President Xi Jinping and China's top leaders, who are already grappling with slowing growth in the world's second largest economy and another bursting bubble. Scroll down for video   Hard to watch: An investor studies an electronic board showing stock information at a brokerage office in Beijing, China. Shares continued to tumbled Wednesday, intensifying fears the world's second largest economy was heading towards the biggest financial disaster since the 1929 Wall Street crash 'The parallels with 1929 are, on the face of it, uncanny,' wrote Jeremy Warner, economics commentator and assistant editor of The Daily Telegraph.   'After more than a decade of frantic growth, extraordinary wealth creation and excess, both economies – America in 1929 and China today – are at roughly similar stages of economic development. 'Indeed, China's credit boom dwarfs that of even the "roaring Twenties".' Beijing intensified efforts at the weekend to pull China's stock markets out of a nose-dive, with top brokerages pledging to buy massive amounts of shares and a report that the government has set up a market stabilisation fund. Beijing has also suspended new share offers in an attempt to take pressure off the market after a 30 per cent plunge in three weeks. The reported suspension of initial public offers (IPOs) came a few hours after extraordinary announcements by major brokers and fund managers, which collectively pledged to invest at least $19billion of their own money into stocks. Mr Warner said: 'The firebreaks that China put in place over the weekend to mitigate the panic are, in practice, not much different from those applied during the Great Crash of 1929, only this time it's public rather than private money that promises to quell the fire. 'This time around, they've thrown the kitchen sink at the problem, but so far it has produced only a mild, and wholly unconvincing, rebound. The fire still smoulders, threatening to break out anew.' Chinese stocks plunged today after the country's securities regulator warned investors were in the grip of 'panic sentiment' and the market showed signs of freezing up as firms scrambled to escape the rout by having their shares suspended. Asian markets down as investors worry over Greek debt crisis +5 Time to wake up: Investors sit in front of screens showing stock market movements at a brokerage house in Shanghai. With the stock markets falling more than 30 per cent in less than a month, wiping out $3.2 trillion, Chinese government officials have cobbled together rescue measures aimed at propping up the market Beijing, which has struggled for more than a week to bend the market to its will, unveiled yet another battery of measures to arrest the sell-off, and the People's Bank of China said it would step up support to brokerages enlisted to prop up shares. With another round of margin calls forcing leveraged investors to dump whatever shares could find a buyer, blue chips that had been supported by stabilisation funds earlier in the week bore the brunt. 'I've never seen this kind of slump before. I don't think anyone has. Liquidity is totally depleted,' said Du Changchun, an analyst at Northeast Securities. 'Originally, many wanted to hold blue chips. But since so many small caps are suspended from trading, the only way to reduce risk exposure is to sell blue chips.' The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 7.1 per cent, while the Shanghai Composite Index dropped 6.3 per cent. Around 30 per cent has been knocked off the value of Chinese shares since mid-June, and for some global investors the fear that China's market turmoil will destabilise the real economy is now a bigger risk than the eurozone crisis. Chinese support to tumbling stock markets seen as 'backsliding' +5 A security guard stands in front of a panel displaying stock indexes of Asian markets at Hong Kong Exchanges in Hong Kong. Losses on the mainland weighed heavily on Hong Kong shares, with the Hang Seng Index down 3.3 percent and shares of Chinese companies listed in the city falling 4.2 per cent 'Also, the ripple effect from the market correction has yet to show up,' wrote Bank of America Merrill Lynch analysts in a note. 'We expect slower growth, poorer corporate earnings, and a higher risk of a financial crisis.' More than 500 China-listed firms announced trading halts on the Shanghai and Shenzhen exchanges on Wednesday, taking total suspensions to about 1,300 – 45 per cent of the market – as companies scuttled to sit out the carnage. With so many small-cap companies sheltering on the sidelines, the ChiNext growth board, which has seen some of the biggest swings in valuations, fell a relatively modest 1 per cent. Beijing's interventionist response has also raised questions about its ability to enact the market liberalisation steps that are a centrepiece of its economic reform agenda. China has orchestrated brokerages and fund managers to promise to buy billions of dollars' worth of stocks, helped by a state-backed margin finance company which the central bank pledged on Wednesday to provide sufficient liquidity. The securities regulator said the Securities Finance Corp had provided 260 billion yuan ($41.8 billion) to 21 brokerages. +5 Tensions are high: People line up at the main gate of the National bank of Greece in central Athens this morning as they wait to withdraw a maximum of €120 euros for the week Unlike other major stock markets, which are dominated by professional money managers, retail investors account for around 85 per cent of China trade, which exacerbates volatility. 'It's uncommon to see so many shares posting consecutive daily limit falls, and the index futures swinging so wildly,' said Wang Feng, CEO and founder of hedge fund firm Alpha Squared Capital Co and a former Wall Street trader. 'It's a stampede. And the problem of the market is that all the players move in the same direction, and are too emotional.' A surprise interest-rate cut by the central bank at the end of June, relaxations in margin trading and other 'stability measures' have done little to calm investors. The barrage of official commentary and new support measures continued on Wednesday. Deng Ge, a spokesman for the China Securities Regulatory Commission, said in remarks posted on its official channel on Weibo, China's version of Twitter, that there had been a big increase in 'irrational selling' of stocks.  The state asset administrator told central-government-owned firms they should not sell shares in their own listed companies and should buy more stock in companies they controlled to stabilise prices. And China's insurance regulator said 'qualified' insurers could increase their ratio of equity assets to 40 pct from 30 pct by buying blue-chip stocks. Greece remains in economical crisis as banks stay closed   Crush: Elderly Greeks push and shove as they argue to be allowed into the bank to withdraw their money But the market sell-off has extended beyond the mainland, with Chinese stocks on U.S. exchanges falling as much as 6.1 per cent on Tuesday, according to the Bank of New York Mellon index of such securities. Hong Kong's Hang Seng Index fell 5.9 per cent, with shares of Chinese brokerages taking a pounding. The impact was also felt in credit markets, where the spread on bonds from securities houses widened by 18-20 basis points. 'Investors are extremely unimpressed with their sudden conscription into national service, and you can see that in their share prices,' said Matthew Smith, a strategist who covers the China financials sector for Macquarie. Despite the grave predictions for the world economy in the event of a Chinese crash, it is the Greek debt crisis that has dominated headlines in recent weeks. Today, the head of France's central bank warned of the dire consequences facing Greece if it fails to strike a bailout deal this week, adding that he fears the country will descend into 'riots and chaos'. Warning that the Greek economy 'is on the edge of catastrophe', Christian Noyer said he was concerned that major civil unrest could break out if a deal isn't struck by the weekend. Greek Prime Minister Alexis Tsipras will address the European Parliament today after European leaders gave his debt-stricken country a final deadline to reach a new bailout deal and avoid crashing out of the euro.

AFTER GERMANY HELPED GREECE. THIS IS WHAT THE GREEKS FEEL. 'No' vote wasn't just about austerity but continued resistance against 'occupation' Old men, women and children were slaughtered in Distomo by the Nazis in revenge for the Greek resistance Many are still traumatised by the events and believe that the Germans still owe the people of Greece a debt for the atrocity Residents believe that the No vote against German-led EU austerity was in part due to the memory of German occupation Greek PM Alex Tsipras has used this sentiment to his advantage in galvanising the people to back his anti-austerity campaign It was the scene of a savage World War II massacre – the murder of 218 old men, women and children in a bitter reprisal against Greek resistance fighters. Four days after the Allied D-Day landings in Normandy in June 1944 a ruthless battalion of German soldiers took out their frustration and anger on unarmed civilians in Distomo, a country village set below mountains where partisans hid. Ordering fixed bayonets an SS officer ordered his troops to spare no one – butchering babies, raping women, slitting the throats of small boys and gunning down anyone who tried to run away. Scroll down for video  +12 Memory: Eleni Nikolaou-Sfountouri, 82, told MailOnline Berlin owes Greece a huge debt for what the Nazis did during the war, adding: 'I don't think Germans today care about what they did to us Greeks during the war. But they are to blame for the conditions we live under today – them and our own politicians' +12 Slaughter: Mrs Nikolaou-Sfountouri was 11 when her parents (Miltiadas and Condelia, pictured with her in 1940), grandparents and two younger sisters were murdered by Nazi soldiers in the massacre The youngest victim was two months old, the oldest in their 80s. More than 70 years later this shameful piece of history – and countless other brutal events throughout the German occupation of Greece – help explain why voters rejected the bail-out plan offered by Berlin and Brussels in Sunday's referendum. The events of World War Two are still raw in many memories and the hard-left government of Alexis Tsipras has used the painful episode in Greek history stir support for their stance against the German-led EU demands for austerity. The "no" vote felt like a continuation the Greek resistance fight against the German occupation Argyris Sfountouris, 75 Survivor Argyris Sfountouris, 75, told MailOnline: 'The "no" vote felt like a continuation the Greek resistance fight against the German occupation.' Mr Sfountouris was just four years old when his parents were murdered in the massacre in Distomo in 1944. Taken in by an orphanage in Switzerland he battled to gain an education and became a physics teacher. Now he returns to his home village for holidays. He told MailOnline: 'There has never been a true friendship between Germany and Greece after what happened here during the war. And that lack of trust was partly responsible for the Greek people voting against the so-called "rescue plan" offered by Berlin and Brussels. 'It was Germany's refusal to make things easier for us [ease the austerity measures] that made people release their anger towards the Germans. 'Newspapers [in Germany] have said we are lazy, that we get huge pensions and that we don't want to work, and most German people believe this is true.' Many observers believe nobody but Greece is to blame for the country's current crisis after decades of tax avoidance, financial public spending sprees and widespread cheating of the system. +12 Murder: In June 1944, a ruthless battalion of German soldiers took out their frustration and anger on unarmed civilians in Distomo, a country village set below mountains where partisans hid +12 Haunted: The Mausoleum in Distomo, Greece, which houses the bones of the 218 killed by the Germans +12 Museum: Pictures of some of the 218 victims massacred by the Germans, on the walls of the Museum for the Victims of Nazism in Distomo, Greece. Ironically, it was paid for by the EU The Mausoleum in Distomo pays tribute to the victims But survivor Eleni Nikolaou-Sfountouri, 82, said Berlin still owes Greece a huge debt for what the Nazis did during the war. She was 11 when her parents, grandparents and two younger sisters were murdered by Nazi soldiers in the massacre. Mrs Nikolaou-Sfountouri said: 'I don't think Germans today care about what they did to us Greeks during the war. But they are to blame for the conditions we live under today – them and our own politicians. They were the victims of a merciless German attack. I don't hate them, I despise them. I feel like Germany is the enemy Eleni Nikolaou-Sfountouri, 82 'I have lived through sad times. I had a lovely father who I loved very much. He was a shoemaker and he was a musician, an educated man. Until I was 11-years-old I lived a happy life but then everything changed. 'Unfortunately I may have to end my days under the same sadness imposed by the Germans [because of the austerity plan] again. 'My two sons are solicitors and they have suffered financially because of the economic crisis. 'My granddaughter studies languages. But she cannot go to the college in Crete where she wants to study because my son cannot afford to send her there. That makes me very sad. 'My niece has a university degree but the only job she can get is as a waitress. If my pension was bigger I would help out my niece but it is not even enough for me. 'If I could send a message to [German Chancellor] Angela Merkel I would say; "Think about how we [the Greek people] have suffered because of what your country has done to us in the past, so please try to do your best for us now."' +12 Rhetoric: Graffiti like this is not uncommon in the Greek capital Athens. The Greek Prime Minister has used the wounds of WWII to rally support against the German-led EU during debt negotiations +12 Intent: One of Prime Minister Tsipras' first acts when he was elected was to leave flowers on a monument at the Kessariani site where hundreds of members of the Greek Resistance were executed by Nazis +12 Debt: Tsipras has demanded Germany pay back more than €160 billion (£112billion) in Second World War reparations. This included a €11 billion loan Greece was forced to give the Nazis during the occupation Mrs Nikolaou-Sfountouri added: 'After the massacre I was an orphan. I cannot live without the memories of what happened on that day. I was brought up by my grandmother and I married a lovely man, but I cannot forget that terrible day. 'The people [of Distomo] did nothing to deserve what happened to them. They were the victims of a merciless German attack. I don't hate them, I despise them. I feel like Germany is the enemy.' A museum for the massacre victims has been built in the centre of the quiet and pretty village. A theatre, showing a 20-minute history film about the massacre, was built five years ago, with EU money. A mausoleum holding the bones of the dead sits on the hill overlooking the village. RAPED, BURNED AND SLAUGHTERED: HOW THE SS DESTROYED DISTOMO German troops from the 4th SS Panzer Grenadier Davison rolled into the sleepy village of Distomo on Saturday 10 June 1944 looking for revenge. Earlier their comrades had been ambushed by Greek partisans hiding out in mountains nearby, killing 40 German soldiers. SS Company Fuhrer Fritz Lautenbach ordered his troops to execute the 12 Greek peasants they had taken hostage of their way into the village. Lautenback then instructed his soldiers to fix bayonets and go door to door and kill anyone they found – women, children and old men.   Evil: SS soldiers Fritz Lautenbach (left) and Kurt Rickert (right) were among the Nazis who fixed bayonets and indiscriminately set about killing the residents of the village Over the next few hours German soldiers murdered, raped, burned and slaughtered their way through the community. Infants, some just days old, were bayonetted in their cribs. Pregnant women were stabbed in the stomach. The Greek Orthodox priest was beheaded. Children were garrotted. Some terrified villagers managed to run away, escaping to nearby caves by the beach. Others hid for hours in their homes as the slaughter continued around them. By the end over 200 had been killed. Their mutilated bodies lay strewn along the streets. No one dare move them for days. Survivors did not return to their homes for months. When they did the whole community dressed in black – in mourning – including the village’s children that were not sent to orphanages abroad. +12 Revenge: Women standing In the graveyard of Distomo, Greece, where victims of a 1944 Nazi massacre are buried. The attack was punishment for an attack by partisans The sound of laughter was not heard in the village for seven years, one survivor has claimed. Axis power Italy invaded Greece in October 1940 but Greek forces held back their advance and pushed them back into neighbouring Albania against over-whelming odds. However Germany pushed through Greek defences in April 1941 and had occupied the country three months later. The Nazis imposed a collaborationist government although Greek partisans continued to take on German forces across the country’s mainland and many islands, particularly Crete. A huge number of civilians died from starvation during the German occupation, an estimated 40,000 in Athens alone. Tens of thousands of others were executed by the Nazis in reprisals against attacks by Greek partisans. German forces finally fled Greece in October 1944 as the Third Reich began to collapse, following the Normandy landings in France and the fall of Stalingrad, in Russia. In the 1960s the German government paid for residents of Distomo to learn professional trades in Germany in an act of goodwill. But the attempts by village residents to sue the German state for war reparations have failed, with Berlin saying the issue was settled in a 1961 deal in which it paid the equivalent of €25million (£18 million) to Athens. Prime Minister Tsipras, of the hard-left Syriza party, has been outspoken about the debt that Germany owed Greece, not the other way round. He spoke to a captive audience when he called for Germany to pay back more than €160 billion (£112billion) in Second World War reparations. This included a €11 billion loan Greece was forced to give the Nazis during the occupation. Mr Tsipras told the Greek parliament in March: 'The government will work in order to honour fully its obligations. But at the same time, it will work so that all of the unfulfilled obligations to Greece and the Greek people are met.' In a symbolic first act as Prime Minister he visited a memorial to 200 Greek resistance fighters executed by the Nazis in May 1944. Christos Papanikolaou, curator of the Distomo Victims museum, added: 'Germany has not fulfilled its obligations to Greece for what happened during World War II.' The Nazi war machine subdued Greek resistance in a matter of weeks in 1941 after the country had defiantly held out against Mussolini's invading Italian army for months. It isn't lost on observers of the current crisis that Greeks celebrate the day they said No to Mussolini every year on October 28. It is called Oxi Day, or No Day. Oxi was plastered all over posters in the run up to the recent referendum and would have evoked memories of World War Two. But more than 160,000 Greek civilians were killed during World War II, and tens of thousands more died of starvation during the 1941-1944 German occupation. +12 Struggle: Argyris Sfountouris, 75, told MailOnline that the  "no" vote 'felt like a continuation the Greek resistance fight against the German occupation.' He was just four when his parents were butchered A proud nation which remembers heroes from ancient times like distant cousins, modern day Greece dates back to the early 1800s when the first nationalists rose up against their Ottoman rulers. This 200-year-old struggle for self-determination, in which hundreds of thousands died in their battle against 'slavery', has shaped the Greek pride in being defiant against hopeless odds, whatever the consequences. A traditional Greek ballad, sung during the country's two national holidays which celebrate liberation from the Ottoman Turks and liberation from the German occupation, evokes the spirit of defiance and freedom. The lyrics say: 'Greece never dies, no bullying or threats will intimidate us. We may be halted but after a rest we will regain our strength and march on to glory!'

'Greece is on the edge of catastrophe. There will be riots and chaos': French central bank boss warns of dire consequences if the country does not make a deal this week Christian Noyer said he was concerned that major civil unrest could break out if a deal isn't struck by the weekend He said he fears that Greece descend into 'riots and chaos' if a bailout compromise is not found this week Alexis Tsipras told the European Parliament today that he is confident the end-of-the-week deadline will be met But he claimed that Greece had been used as an 'austerity laboratory' by the rest of Europe over the past five years The head of France's central bank has warned of the dire consequences facing Greece if it fails to strike a bailout deal this week, adding that he fears the country will descend into 'riots and chaos'. Warning that the Greek economy 'is on the edge of catastrophe', Christian Noyer said he was concerned that major civil unrest could break out if a deal isn't struck by the weekend. Speaking at the European Parliament today Greek Prime Minister Alexis Tsipras said he was confident of meeting an end-of-the-week deadline set by eurozone leaders to reach a bailout deal or risk leaving the euro. Calling on all sides to work together, Tsipras said: 'This is a European problem which requires a European solution... let us not allow it to become a divided Europe,' he said. He added that Greece, which has imposed tough reforms in exchange for two EU-IMF bailouts since 2010, had been used as an 'austerity laboratory' by the rest of Europe. Scroll down for video +30 Tensions are high: People line up at the main gate of the National bank of Greece in central Athens this morning as they wait to withdraw a maximum of €120 euros for the week   Concern: Warning that the Greek economy 'is on the edge of catastrophe', Christian Noyer (right) said he fears that civil unrest could break out if Greek Prime Minister Alexis Tsipras doesn't strike a deal by the weekend +30 Crush: Elderly Greeks push and shove as they argue to be allowed into the bank to withdraw their money +30 Despair: A woman holds her head in her hands outside a National Bank of Greece branch in Kallithea +30 A queue of people snakes around the block outside a branch of the National Bank of Greece in Kallithea today +30 A pensioner exits a National Bank branch after receiving part of his pension in Athens this morning Greece today submitted a request for aid from Europe's bailout fund and is rushing to detail a plan of economic reforms that creditors want to see this week if they are to save the country from financial collapse and keep it in Europe's joint currency. All 28 European Union leaders will then examine the plans on Sunday in a make-or-break summit that will either rescue Greece's moribund economy, or leave it to crash out of the single currency - a so-called 'Grexit'. Speaking on French radio this morning, Noyer said: 'The Greek economy is on the edge of catastrophe. A deal absolutely must be found on Sunday because it will be too late after that and the consequences will be serious.' If a deal isn't struck 'there could be riots... and chaos in the country,' he added. Greek banks remain closed for a second week, with ATM withdrawals limited to €60 a day. It is believed that creditors may demand that that figure is reduced still further to just $20 as part of the bailout package. Noyer said it was 'impossible' to re-open the banks while confidence was so low because there would be an 'immediate run' on tellers. +30 Speaking at the European Parliament in Strasbourg today, Greek prime minister Alexis Tsipras said his country has submitted a broad proposal to get another rescue plan and will present details in the coming days +30 Greek Prime Minister Alexis Tsipras shakes hands with a Member of the European Parliament this morning +30 Greek Prime Minister Alexis Tsipras addresses the European Parliament in Strasbourg today +30 Members of the European Parliament hold placards which reads 'No - Freedom to Greece' ahead of the speech of Greek Prime Minister Alexis Tsipras at the European Parliament in Strasbourg today +30 International affair: Nigel Farage, British Member of the European Parliament and leader of Ukip has an 'Oxi' (No) placard on his desk as he reads through notes this morning ARE SOME GREEKS GOING ON CREDIT CARD SHOPPING SPREES WHILE THEY STILL CAN? Greek citizens concerned that their money may soon be worth nothing are going on credit card spending sprees in the hope the items they buy will hold their value. Sales of expensive electronic items, such as iPads and PlayStation consoles are understood to have rocketed, despite ATM withdrawal limits held at just €60 a day. But credit and debit cards can be used as normal, prompting Greeks to  spend the money while they still can. Natasa, a shop assistant at electronics retailer Plaisio Computer SA in central Athens said: 'People are spending the money they have in the bank because otherwise they're afraid they won't get it out.' Speaking to Bloomberg, she added: 'A Mac is something that keeps its value.' Speaking on BBC Radio 4's today programme this morning, the EU's Economic Affairs Commissioner Pierre Moscovici said: 'The Commission doesn't want the Grexit.' 'Although difficult, an agreement is still possible and more necessary than ever. Grexit would be a terrible failure, a collective mistake and we are fighting to avoid it.' Asked whether if Greece leaves the eurozone other countries will struggle to keep it together, Moscovici said: 'I'm not talking about that.' 'The Greek government has come with goodwill, the dialogue has started again and we are waiting for a comprehensive, credible set of reforms.' 'When they come we will consider them as we have until Sunday.' Tsipras earned both cheers and jeers as he told politicians at the European Parliament that his country is seeking a deal that will mean a definitive end to his country's financial crisis, not just a temporary stop-gap. Mr Tsipras insisted last Sunday's referendum result, in which voters soundly rejected a previous creditors' reform proposal, does not mean a break with Europe. He said Greece's proposals, which European officials have said must be finalised and submitted by Thursday, aim to address the country's problems beyond the immediate financing requirements. 'The proposals we have made to our partners are ones that involve credible reforms with an acceptable degree of burden-sharing, which will not bring recessionary effects with it. 'We need to ensure the medium-term funding of our country with a development and growth programme,' Mr Tsipras told the politicians gathered in Strasbourg, France. +30 Calm: Alexis Tsipras prepares for his speech during the at the European Parliament in Strasbourg today +30 Unlikely: Jean-Claude Juncker, the President of the European Commission, is photographed with an 'Oxi' (No) placard in his hand during the plenary session with Greek Prime Minister Alexis Tsipras this morning +30 Speaking at the European Parliament today Greek Prime Minister Alexis Tsipras said he was confident of meeting an end-of-the-week deadline set by eurozone leaders to reach a bailout deal or risk leaving the euro +30 Members of the Europe of Freedom and Democracy Group show their support for the Greek Prime Minister +30 Support: Members of the Europe of Freedom and Democracy Group show 'no' and 'oxi' placards at their desks during the speech of Greek Prime Minister Alexis Tsipras this morning +30 Waiting for money: A queue of people outside a branch of the National Bank of Greece in Athens this morning +30 An elderly woman waits outside a bank in Athens this morning hoping to withdraw up to €120 from her pension Greece this morning submitted a written request for a new support programme from Europe's bailout fund, according to Michel Reijns, the spokesman for the eurozone's top official, Jeroen Dijsselbloem. Greece needs to back that up by presenting by the end of Thursday a detailed, cost-assessed plan on the economic measures it would take in exchange for loans. So far, Greece has only produced an outline of the measures. European leaders will hold a summit on Sunday to decide whether the plan is good enough. Applause rose from leftist quarters when he said aid to Greece only helped out banks, not ordinary Greeks. A few called for compromise. The head of a conservative group in the Parliament, Belgium's Guy Verhofstadt, said he was 'furious' at Mr Tsipras's failure to spell out specifics of his reform plans. Ukip leader Nigel Farage told Mr Tsipras: 'Your country ... should have never joined the euro' and urged him to quit the common currency. Britain is not part of the euro. The political talks come at a time of capital controls in Greece, with the country's banks shut since last week, Greeks limited to withdrawals of 60 euros per day and unable to send money abroad, including the payment of supplies or bills, without special permission. In his speech to the European Parliament, Mr Tsipras aid Greece's troubles date to long before he took office five months ago He described Greece as having been used as an 'austerity experiment' for the last five years of bailout reforms imposed on the country that led to spiralling unemployment and poverty, and a contraction of the economy by a quarter. Greece remains in economical crisis as banks stay closed   +30 Calls for peace: A bank worker attempts to control the queue of people outside a branch of the National Bank of Greece in Athens earlier today +30 An elderly woman looks concerned as she stands outside a branch of the National Bank of Greece in Athens +30 Patience A queue of people outside a branch of the National Bank of Greece in Kallithea this morning +30 Bank workers allow several elderly people into a branch of the National Bank of Greece in Athens today +30 Pensioners wait for the opening of a National Bank branch to receive part of their pensions in Athens today The experiment with austerity, Tsipras said, had clearly failed. 'We demand an agreement with our neighbours, but one that gives us a sign that we are on a long-lasting basis exiting from the crisis - which will demonstrate to us that there is light at the end of the tunnel. An agreement which will bring about the credible and necessary reforms,' he said. Mr Tsipras vowed to continue reforms already undertaken. 'But let us not forget that in the last five years, the Greek people have made a tremendous effort for adjustment - a very difficult and hard process of adjustment. This has exhausted the patience and resilience of the Greek people.' The Greek crisis has frayed the nerves of other European leaders, who have accused the Greek government, elected in January on promises to repeal austerity, of foot-dragging and exacerbating the situation. Highlighting the rising anger with Mr Tsipras, European Commission president Jean-Claude Juncker had a stark warning for Greece after Tuesday's eurozone summit. 'We have a Grexit scenario, prepared in detail,' he said, apparently referring to the situation in which Greece would be forced out of the currency union. Greece's eurozone partners have steadfastly said they want to help Greece stay in the currency club but have just as often complained about Greece dragging its feet during months of negotiations. One big sticking point in the talks is Greece's demand that the terms of its bailout loans be made easier. European officials are split on the issue, with lead eurozone lender Germany still reluctant. 'Door for talks remains open': Merkel on Greece proposals   +30 Waiting in line: A queue of people outside Alpha bank in the centre of Athens earlier this morning +30 Worries: A Greek man appears deep in thought as he queues outside a bank in central Athens this morning +30 People stand in a queue to use the ATMs of a bank in Athens this morning. The maximum withdrawal is still only €60 a week, while pensioners can withdraw up to €120 a week from their pension pots +30 A bank employee tries to calm a group of pensioners down as they wait to be allowed to withdraw their money   Fidel Castro, former leader of Cuba and a committed Socialist, has written to Greek Prime Minister Alexis Tsipras to praise his 'brilliant political victory' in convincing the Greeks to vote no to austerity. Earlier yesterday Jean-Claude Juncker, one of the men Tsipras negotiated with this evening, dismissed the same referendum as an 'irrelevant circus' saying he couldn't understand what the result meant   The International Monetary Fund called last week for European states to accept longer repayment periods and lower interest rates on their loans to Greece. Many economists say that Greece's debt burden, at almost 180% of annual GDP, is unsustainable for a country its size. Greece has been granted two bailout programmes worth a total of €240 billion euros (£172 billion) in loans from other eurozone countries and the IMF. But the spending cuts and tax increases demanded as a condition for the loans have hit growth, sending the country into a six-year recession and pushing unemployment to 25%. As talks broke down between the Eurozone countries and Greece in Brussels last night, European Council president Donald Tusk said: 'I have no doubt that this is the most critical moment in the history of the EU. 'The stark reality is that we only have five days left to find the ultimate agreement. 'Until now I have avoided talking about deadlines, but tonight I have to say it loud and clear that the final deadline ends this week.' German chancellor Angela Merkel last night also revealed for the first time that leaders have been discussing the possibilities of a parallel currency if Greece falls out of the Euro. She said the fact that all EU leaders were being summoned to the talks on Sunday showed how urgent the situation was.   After years of building up more than $400 billion in debt, Greece was devastated by the recent global economic crisis. Fearing the fallout from a Greek bankruptcy, fellow Eurozone members provided aid packages -- under strict conditions, including the adoption of severe austerity measures. Greece is entering a fifth straight year of recession, its economy poised to shrink another 5 percent in 2012. Average unemployment is at a record 21.8 percent -- with youth unemployment (under 25) at 51 percent. Years of increasingly difficult conditions have hit the citizens of Greece hard, and the uncertainty and frustration have led some to flee, a few to take their own lives. Collected here are images from a nation in the midst of a deepening crisis. Dimitris Stamatakos, 36, sits in a field on land he is renting near his home in the village of Krokeae in the Peloponesse area of Greece, on March 18, 2012. Before the crisis Stamatakos was able to make a living by selling olives that he farmed on the land he owns, now he is forced to work for neighboring farms and do odd jobs to earn his living. (Reuters/Cathal McNaughton) 2 The setting sun illuminates buildings in Athens, Greece, on March 15, 2012. (Reuters/Cathal McNaughton) # 3 Aris Christodoulou, 39, a martial arts instructor, poses for a picture in his gymnasium in Athens, on March 28, 2012. When asked how he had been affected by the economic crisis, Christodoulou replied, "My clients cannot meet the subscription fees and me and my partners aren't taking a wage". (Reuters/Cathal McNaughton) # 4 Members of the Greek Communist Party shout slogans during a rally against the austerity measures in Athens, on March 20, 2012.(AP Photo/Thanassis Stavrakis) # 5 A padlock on the entrance of an abandoned factory in the industrial area at Komotini town in northern Greece, on March 3, 2012. After more than 30 years as a factory worker, Dimitris Manikas a former employee of a trash can company based in the same area, was dreaming of retirement and plans to get married for the third time when a redundancy notice blew his hopes away. Laid off from his job, the 52-year-old father of two called off his wedding -- even though he had bought the wedding bands. Without any income, he feared his house would be next to go. Driven to despair, Manikas on Thursday barged into the factory whose name he had tattoed on his forearm, to turn a hunting rifle on his former boss and another worker, injuring them both. He then held three people hostage, surrendering only after 11 hours of negotiations with police. (Reuters/Grigoris Siamidis) # 6 Phoevos Doudonis, 37, an actor/singer, poses for a picture in front of the Acropolis in Athens March 28, 2012. When asked how he had been affected by the economic crisis, Duodonis replied, "up to April 2011 I was making a good living as an actor and singer but I have been finding it difficult since then to find any work. Fees have been cut by 70-80% and some theatres don't pay at all.(Reuters/Cathal McNaughton) # 7 Afghan immigrants jump from an abandoned rail car to catch the train for Athens in Orestiada, on April 9, 2012. Human rights groups have heavily criticized Greece over the the building of a six-mile-long fence topped with razor wire, and for plans to intern illegal immigrants in former military bases pending deportation. The debt-crippled country is the European Union's main entry point for illegal immigrants, mostly from Asia and Africa. (Aris Messinis/AFP/Getty Images) # 8 Protesters run from police after hurling petrol bombs during violent anti-austerity demonstration in central Athens, on February 12, 2012. Historic cinemas, cafes and shops went up in flames in central Athens as black-masked protesters fought Greek police outside parliament, while inside lawmakers endorsed a new EU/IMF austerity deal. (Reuters/Yannis Behrakis) # 9 Nick Boudas, 54, a bread delivery man, poses for a picture near the village of Filiatra, on March 23, 2012. When asked how he had been affected by the economic crisis, Boudas replied, "I lost my job, I lost everything." (Reuters/Cathal McNaughton) # 10 The sun sets behind volcanic islands seen from the island of Santorini in the Aegean Sea, on March 14, 2012. Greek tourism revenues could drop by up to 5 percent in 2012 due to a fall in pre-bookings from Germany, an industry official told Reuters, denting hopes the key sector will help pull the country out of the financial crisis. Greece has been hoping that tourism, which accounts for about 15 percent of GDP and employs roughly a fifth of the country's 4 million workforce, will boost its bleak economic prospects.(Reuters/Yannis Behrakis) # 11 A woman places a candle at the site where 77-year-old retired pharmacist Dimitris Christoulas fatally shot himself at Athens' main Syntagma square, on April 4, 2012. The Greek pensioner picked the busiest public area in Athens to commit suicide on Wednesday, leaving a note which police said linked his suicide with the country's acute financial woes. Notes pinned to the tree read: "Austerity kills," "Government of murderers," and "Enough." (AP Photo/Petros Giannakouris) # 12 Mourners chant slogans in front of the coffin containing the body of Dimitris Christoulas, in Athens, on April 7, 2012, who committed suicide in a central Athens square Wednesday. In a suicide note, he claimed the economic crisis affecting Greece had "destroyed" him. Hundreds attended the ceremony at an Athens cemetery. (AP Photo/Petros Giannakouris) # 13 Passers-by cast shadows on pavement near a pool of blood following an attack on a policeman by protesters in Athens' main Syntagma Square, on April 7 2012. A protest march that followed a memorial service for Dimitris Christoulas turned violent with marchers beating a policeman and stealing his uniform, bulletproof vest, handcuffs and radio. (AP Photo/Kostas Tsironis) # 14 Christina Tchatchou, 30, an actress/singer, poses for a picture in her bedroom in Athens, on March 27, 2012. When asked how she had been affected by the economic crisis, Tchatchou replied, "I haven't been that affected as I didn't get paid that much before anyway. However I get less work than I did." (Reuters/Cathal McNaughton) # 15 A hammer thrower leaves a training area at the Agios Cosmas sports facilities in southern Athens, on April 3, 2012. The head of Greece's athletics federation said that the body is considering suspending its operations due to deep cuts in state funding over the past two years.(AP Photo/Thanassis Stavrakis) # 16 A man walks by a wall adorned with graffiti in Athens, on march 8, 2012. (Louisa Gouliamaki/AFP/Getty Images) # 17 Dimitris Kazakos, 31, a waiter, poses in the Placa area of Athens, on March 28, 2012. When asked how he had been affected by the economic crisis, Kazakos replied, "It's dramatically changed my life. People think twice about eating out and leaving a tip."(Reuters/Cathal McNaughton) # 18 Natassa Papakonstantinou, 43, calls a recruitment agency from her apartment in Kifisia, a suburb of Athens, on March 14, 2012. Natassa lost her telecom services job of 12 years in August of 2011, and was not paid for the last six months. She is now living off her savings and 461 euros ($611) from the government per month. When her savings run out in August she must leave her flat. She spends several hours a day searching and applying for jobs on the internet but still has not found any. Natassa is unable to afford to socialize much and has no family so she spends long periods of time alone. She says "I don't even listen to music much now. I used to love it but in the bad times of your life you forget about your hobbies." (Reuters/Cathal McNaughton) # 19 A visitor looks at antiquities at the National Archeological museum in Athens, on March 18, 2012. Faced with massive public debt as it moves into a fifth year of recession, Greece is finding that its fabled antiquity heritage is proving a growing burden. "Greece's historic remains have become our curse," whispered an archaeologist worried about budgets that are nonexistent or badly stretched.(Aris Messinis/AFP/Getty Images) # 20 Leonidas Polymenokos, 40, stands near a production bay in his family's olive oil factory near the village of Lagio in the Peloponesse area of Greece, on March 21, 2012. The factory which he runs with his three brothers first started production in 2000. Business is going well and they would like to expand. However this is proving difficult as they are finding it hard to get the necessary loans from the banks. When asked about the economic crisis in Greece he says, "we are all boiling in the same pot". (Reuters/Cathal McNaughton) # 21 Customers crowd a truck to buy cheap sacks of potatoes sold directly by farmers at cost price in the northern Greek town of Thessaloniki, on March 2, 2012. Farmers in northern Greece have joined forces with local residents to provide cheap produce to the people, who make orders by email, and also to help producers who say they are being squeezed by middlemen. Similar "solidarity" actions have started to be organized in other Greek cities. (Sakis Mitrolidis/AFP/Getty Images) # 22 George Andrianakis, 56, stands on the back of his pickup truck with one of his goats in the yard of his farm in the village of Stafania, Greece, on March 21, 2012. Andrianakis lives with his wife Athina, 48, and sons Dimitris, 24, and Panagiotis, 21. They all help with the milking of the goats and sheep as well as the harvesting of orange and olive trees, but his profit margins are down by almost 50 percent with production costs rising by almost 30 percent. He says: "I am surviving rather than living". (Reuters/Cathal McNaughton) # 23 A drug addict lays on the ground in central Athens. Addicts have been a presence in Athens city center for more than 20 years, but with the recent crisis, things are getting worse for them, according to Philippos Dragoumis, president of a municipal center for prevention.(Iakovos Chatzistavrou/AFP/Getty Images) # 24 People make their way around the coastal town of Patra in the Peloponnese area of Greece, on March 25, 2012.(Reuters/Cathal McNaughton) # 25 Pauline Delli, 32, a psychiatric nurse, poses in the street outside her place of work in Athens, on March 27, 2012. When asked how she had been affected by the economic crisis, Delli replied, "I am just living day to day and not thinking about the future."(Reuters/Cathal McNaughton) # 26 Sostis, a 60 year-old former sailor and the only human inhabitant of the volcanic islet of Palaia Kameni located in the caldera of Santorini, enters the Saint Nicolas church, on March 17, 2012. Initial data shows pre-bookings for the high summer season from Germany, which accounts for about 14 percent of Greece's total number of visitors, are down 20-30 percent. (Reuters/Yannis Behrakis) # 27 Dasalakis Theodoros, 60, a taxi driver, poses for a picture in front of his taxi at the port in Athens, on March 28, 2012. When asked how he had been affected by the economic crisis, Theodoros replied, "I share the taxi with my son so we can work 24 hours a day between us to make things work." (Reuters/Cathal McNaughton) # 28 An employee at the state-run Workers' Housing Organization (OEK) crouches on a ledge while threatening to jump as a colleague speaks to her, in central Athens, Wednesday, February 15, 2012. The woman was fired as the agency was due to be shut as part of sweeping new austerity measures demanded by Greece's EU-IMF rescue creditors. After hours of negotiations, the woman was brought to safety as she came in from the balcony. (AP Photo/Thanassis Stavrakis) # 29 A woman receives a free meal during a soup kitchen organized by a Greek humanitarian group in Athens' main Syntagma square, on April 1 2012. Greece's austerity cutbacks have deepened the economic recession, and torn holes in the country's social fabric. Unemployment has hit a record high of 21 percent, and thousands of Greeks depend on church and municipal soup kitchens for sustenance.(AP Photo/Kostas Tsironis) # 30 Christos Vassiliou, 79, retired sausage maker, poses for a picture in a shopping center in central Athens, on March 28, 2012. When asked how he had been affected by the economic crisis, Vassiliou replied, "my pension has been cut by 250 euros ($334) a month. If it continues like this I will be thrown out of my house because I can't afford my rent." (Reuters/Cathal McNaughton) # 31 A stray dog barks at riot police during a high school students' anti-austerity protest in Athens, on February 17, 2012.(AP Photo/Thanassis Stavrakis) # 32 A man drinks coffee in front of a mural near the coastal town of Kalamatta in the Messinia area of Greece, on March 23, 2012.(Reuters/Cathal McNaughton) # 33 George Kanlopoulos, 55, a guide, mechanic and hotelier, poses for a picture in his garage at the town of Sparta, in the Peloponnese area of Greece, on March 20, 2012. When asked how he had been affected by the economic crisis, Kanlopoulos replied, "I haven't been affected as much as others because I am a mountain guide as well as a mechanic and hotel owner. This means I have more options."(Reuters/Cathal McNaughton) # 34 A disused basketball court in a field on the Greek - Turkish border outside Orestiada, northern Greece, on April 09, 2012.(Aris Messinis/AFP/Getty Images) # 35 Voula Stamatakos, 72, a housewife, poses for a picture in her home in the village of Krokeae, Greece, on March 18, 2012. When asked how she had been affected by the economic crisis, Stamatakos replied, "My pension has been cut but I try to stay positive."(Reuters/Cathal McNaughton) # 36 Dimitris Stamatakos, 36, is pictured with his wife Voula, 32, and son Elias, 1, in the living room of their home in the village of Krokeae, on March 18, 2012. Before the crisis Stamatakos was able to make a living by selling olives that he farmed on the land he owns, now he is forced to work for neighboring farms and do odd jobs to earn his living. The crisis is also putting a strain on his marriage to his wife Voula, 32. He says, "I fight with my wife a lot about money. She thinks I should be doing more. What more can I do? I'm just getting by."(Reuters/Cathal McNaughton) # 37 A blind protester shouts against anti-austerity measures during a protest near the Prime Ministers office in Athens, on February 21, 2012.(AP Photo/Dimitri Messinis) # 38 Asimina, a 70-year-old pensioner, gathers laundry on the terrace of her home with the ancient Acropolis seen in the background in Athens, on March 2, 2012. Asimina, who identified herself only by her first name, said she lives with her husband on a combined monthly income of 600 euros ($793) from a state pension, and says a series of emergency taxes imposed by the crisis-hit country's government have made daily life difficult. (AP Photo/Petros Giannakouris) # 39 A man takes the stairs of the empty Athens metro station during a 4-hour strike on March 28, 2012 in protest of the austerity measures aiming at streamlining public transportation. (Louisa Gouliamaki/AFP/Getty Images) # 40 (1 of 4) George Kapetanios (right) poses for a photograph with his wife Katarina Germanou (center) and their daughter Paraskevi Kapetanios in Potters Bar, on the outskirts of London, England, on March 5, 2012. Put out of business in Greece by a shrinking economy that has been crushed by the eurozone crisis, unable to find work at home and desperate to stay afloat financially, Kapetanios, his wife and daughter moved to London months ago so the parents could find work. Now they are hoping for a brief taste of their former family life when stepson Thanos Kehagias, who remained in Greece to finish his university studies, comes for a visit. (Reuters/Paul Hackett) # 41 (2 of 4) George Kapetanios in the kitchen of Ta Dilina Greek restaurant in north London where he works as a chef, on February 29, 2012.(Reuters/Paul Hackett) # 42 (3 of 4) Paraskevi Kapetanios poses for a photograph at a coffee shop in Potters Bar, on the outskirts of London, on March 5, 2012. Unable to find work at home in Greece, Paraskevi's parents moved to London months ago so they could find work.(Reuters/Paul Hackett) # 43 (4 of 4) 23-year-old Thanos Kehagias holds his mother's dog Vagos as he poses for a picture outside his student flat close to the university where he is studying mechanical engineering in the Greek city of Patra, on March 26, 2012. Thanos Kehagias said he has made peace with his parents' decision to take his sister and leave him behind while they made a new start in London. He said he lives on just over 6 euros ($7.87) per day and can only afford one daily meal at the cheap university restaurant. (Reuters/Cathal McNaughton)

Driven in part by higher fuel costs connected to events in the Middle East and North Africa, global food prices are 36 percent above their levels a year ago and remain  volatile, pushing people deeper into poverty, according to new World Bank Group numbers. “More poor people are suffering and more people could become poor because of high and volatile food prices,” said World Bank Group President Robert B. Zoellick. “We have to put food first and protect the poor and vulnerable, who spend most of their money on food.” According to the latest edition of the World Bank’s Food Price Watch, a further 10 percent increase in global prices could drive an additional 10 million people below the $1.25 extreme poverty line. A 30 percent price hike could lead to 34 million more poor. This is in addition to the 44 million people who have been driven into poverty since last June as a result of the spikes. The World Bank estimates there are about 1.2 billion people living below the poverty line of US$1.25 a day

The food bubble is now starting to implode. What does it all mean? It means that as these economic and climate realities unfold, our world is facing massive starvation and food shortages. The first place this will be felt is in poor developing nations. It is there that people live on the edge of economic livelihood, where even a 20% rise in the price of basic food staples can put desperately-needed calories out of reach of tens of millions of families. If something is not done to rescue these people from their plight, they will starve to death. Wealthy nations like America, Canada, the U.K., and others will be able to absorb the price increases, so you won’t see mass starvation in North America any time soon (unless, of course, all the honeybees die, in which case prepare to start chewing your shoelaces…), but it will lead to significant increases in the cost of living, annoying consumers and reducing the amount of money available for other purchases (like vacations, cars, fuel, etc.). That, of course, will put downward pressure on the national economy. But what we’re seeing right now, is just a small foreshadowing of events to come in the next couple of decades. When gasoline is $10 a gallon in the U.S., how expensive will food be around the world? The answer, of course, is that it will triple or quadruple the current price. And that means many more people will starve. One thing that has become abundantly clear in all this is that the era of cheap food and cheap fuel is over. Add to this the fact that global climate change is already underway, altering weather patterns and creating floods, droughts and other agricultural calamities, and you start to get the picture of just how bad things might get. That’s not even to mention the very serious problem of collapsing honeybee populations due to a mysterious condition called colony collapse disorder that’s devastating honeybee populations across North America. Honeybees, in case you didn’t know, pollinate plants that represent about 30% of all the calories consumed by Americans. That’s about one out of every three bites of your dinner, and it all depends on the “free” work performed by honeybees — bees who are apparently going on strike by refusing to keep working for us.     How Large Will The U.S. National Debt Be In 2015? - Try $1.2 Million Per Taxpayer F@#k The Fed (A Central Bank Love Song) I Need More Quantitative Easin' Introducing the Utah Sound Money Act - An Idea Whose Time Has Come Jim Rogers: "We've Had 3 Central Banks In The History Of America, 2 Of Them Failed And This Will One Will Too!" Life Without The Fed: Examining The Suffolk System CHART: Why The United States Is Doomed To Fail U.S. Debt Clock Ticks Above $14.5 Trillion Flashback 2006: Obama On Raising The Debt Ceiling National Debt Gets Too Big For Debt Clock Every 6 Months, Another Trillion In Debt CHART: Ten Years, Ten Increases In The Debt Ceiling CHART: U.S. Military Spending Vs. The World   The U.S. Is Broke But Somehow Finds $1 Trillion To Operate New F-35 Fighter, China Makes A Killing On Gold, Muni Default Chart, Wall Street Pay Watch, Nil Baby Nil (LINKS) Chinese Gov't records huge profit on gold holdings Government Cash Handouts Now Top Tax Revenues Just How Many Muni Defaults Are There? - John Carney No Bank Was More Generous With Compensation In 2010 Than UBS How to read a national association of realtors press release 'Jumbo' Loans Squeeze Looms Over Home Buyers - Reuters US approves first offshore wind farm Nil, Baby, Nil: Congress Fails To Pass A Single Oil Spill Law Obama vows to restore Gulf Coast one year after spill Plans for tough European rules on oil spills come under attack Oil companies pumped millions of gallons of carcinogens into water supply Day after scientists hail recovery of Gulf, new photos show the real damage Homeland Security Abandons Color-Coded Terror Alerts "The Risk of Nuclear Catastrophe Could Total Trillions" Lockheed Martin F-35 Operating Costs May Reach $1 Trillion Hidden Tracking Files Found in iPhone, iPad The global economy is doomed to implosion, and here are four charts which explain why. Though the complexities may appear endless, the global economy's coming implosion is really fairly easy to understand: here are four charts which do the heavy lifting. It boils down to these basics: 1. When money is dear and difficult to borrow, then productivity and capital accumulation are encouraged, speculation, malinvestment and debt-based consumption are discouraged. 2. When money is "free" (zero-interest rate policy) and liquidity is unlimited, then the opposite conditions hold: speculation in risk assets, malinvestment and debt-based consumption are all encouraged, and productivity and capital accumulation are heavily discouraged. 3. When debts exceed the value of the underlying assets, the only way out of the Tyranny of Debt is to write off the debt on both the borrower and lender's balance sheets, wiping out their capital via liquidation and bankruptcy. 4. The "extend and pretend" policy pursued by all major nations is simply transferring the impaired debt from private hands to the taxpayers (public debt), crippling the economy with higher taxes and higher debt service. 5. The Central State's "extend and pretend" policy requires heavy borrowing every year to prop up the status quo, pushing the Central State (or equivalent, i.e. the Eurozone) in an inescapable double-bind: either continue increasing public debt and cripple the economy with high taxes and high public-debt servicing costs, or let the financial status quo of "profits are private, losses are public" implode. The first path leads to default, as the Tyranny of Debt cannot be masked for long, while the second path wipes out the Financial Power Elite which feeds the politicians. Here are the charts. Note how the speculative economy created the illusion of rising wealth for the bottom 90%, an illusion stripped away by the Default Economy. In essence, the Financial Power Elites profited immensely from creating this illusory wealth which gave the bottom 90% the false sensation that their declining earnings and purchasing power were being offset by the "magic" of asset bubbles. Then, when the bubble popped, the Financial Power Elites transferred the impaired assets to the taxpayers, a process which is still underway. The politicos of both parties are complicit; behind the simulacra of toothless "reforms," this process proceeds in myriad ways (Bank of America transferring toxic debt to Fannie/Freddie, etc.) Behind the smokescreen of conjuring a "wealth effect" to foster more consumption, the Fed's purchase of Treasuries (QE2) serves this transfer-of-debt-to-the-public process. This same process is playing out throughout the global economy: Greece, Ireland, the U.S., and eventually, in China when its monumental property bubble pops. These images, by photographers of the Farm Security Administration /Office of War Information, are some of the only color photographs taken of the effects of the Depression on America’s rural and small town populations. By 2012, the photographs and captions will haunt this generation as the cyclical downturn worsen due to high unemployment and huge tax burden. More than 15 million Americans are unemployed, homelessness has increased by 50 percent in some cities, and 38 million people are receiving food stamps, more than at any time in the program’s almost 50-year history. Evidence of rising economic hardship is ample. There’s one commonly used standard for measuring it: the U.S. Census Bureau’s poverty rate. It guides much of federal and state spending aimed at helping those unable to make a decent living. But a number of states have become convinced that the federal figures actually understate poverty, and have begun using different criteria in operating state-based social programs. At the same time, conservative economists are warning that a change in the formula to a threshold that counts more people as poor could lead to an unacceptable increase in the cost of federal and state social service programs. When Census publishes new numbers for 2009 in September, experts predict they’ll show a steep rise in the poverty rate. One independent researcher estimates the data will show the biggest year-to-year increase in recorded history. According to Richard Bavier, a former analyst for the federal Office of Management and Budget, already available data about employment rates, wages, and food stamp enrollment suggest that an additional 5.7 million people were officially poor in 2009. That would bring the total number of people with incomes below the federal poverty threshold to more than 45 million. The poverty rate, Bavier expects, will hit 15 percent — up from 13.2 percent in 2008, when the Great Recession first started to take its toll. Still, the U.S. Census Bureau’s new numbers will offer only a partial picture of how the nation’s sputtering economy is affecting the poorest Americans — a problem state officials and the Obama administration want to address. Overestimating food costs The current formula for setting the federal poverty line — unchanged since 1963 — takes the cost of food for an individual or family and multiplies the number by three, under the assumption that people spend one-third of their incomes putting meals on the table. While the formula may have been a good way to estimate a subsistence cost of living in the early 1960s, experts say food now represents only one-eighth of a typical household budget, with expenses such as housing and child care putting increasing pressure on struggling families. In addition, the official measure fails to account for regional differences in the cost of housing, it doesn’t include medical expenses or transportation, and at $22,000 for a family of four, the poverty line is considered by many to be simply too low. Equally worrisome for policy makers is the Census Bureau’s failure to consider in-kind federal and state aid in calculating income. The existing formula counts only pre-tax cash income, leaving out such benefits as food stamps, housing vouchers and child-care subsidies, as well as federal and state tax credits for the working poor. As a result, the nation’s official poverty count is unaffected by the billions spent on safety-net programs. Yet it remains by far the most frequently used measurement of how well governments are taking care of their most vulnerable citizens. Conservatives have consistently argued that if safety-net programs were taken into account, the poverty rate would be much lower. At the same time, advocates for the poor have argued that poverty counts would be much higher if the cost of housing, child care and other expenses were factored in. Nearly two decades ago, Congress asked the National Academies of Science (NAS) to revisit the official poverty measure and come up with recommendations for a new measure that would satisfy critics on both ends of the spectrum. This past March, the Obama administration said it would use the NAS 1995 guidelines to update the federal government’s poverty calculation and promised to unveil the first new “supplemental poverty measure” in September of 2011. “The new supplemental poverty measure will provide an alternative lens to understand poverty and measure the effects of anti-poverty policies,” Under Secretary of Commerce Rebecca Blank said. “Moreover, it will be dynamic and will benefit from improvements over time based on new data and new methodologies.” Under the NAS recommendations, Commerce Department expenditure data for food, clothing, shelter and other household expenses would be used to set a poverty threshold for a reference family of four — two adults and two children. Then a family or individual’s resources would be compared to that line by including income and in-kind benefits, with taxes and other non-discretionary expenses, such as medical expenses and child care, excluded. Because many expect the new calculation will result in a higher poverty count, the March announcement met with fiery criticism from some conservatives who charged the federal government could ill afford to increase its safety-net spending. State experiments But state and local policy makers applauded the move because they said it would give them the tools they need to assess the effectiveness of anti-poverty programs. In New York City, for example, where an NAS-type poverty measure was adopted three years ago, Mayor Michael Bloomberg said the new data would allow the city to pinpoint who needs assistance most and which of the city’s social services have been most effective at improving its residents’ standard of living. Using an updated measurement, New York City found that children — the recipients of a broad range of social welfare programs — were less poor than originally thought, while elders, who were struggling with previously unaccounted for medical expenses, were poorer. As states become increasingly challenged by shrinking revenues and rising numbers of people in need, more than a dozen have set up commissions to help low-income families and many have set poverty reduction goals. Among them, Minnesota and Connecticut have used NAS-like formulas to assess the effectiveness of current and proposed anti-poverty measures. With technical assistance from the public policy research group The Urban Institute, both states used the results to support aggressive anti-poverty campaigns. Minnesota has a Legislative Commission to End Poverty in Minnesota by 2020, and Connecticut created a Child Poverty and Prevention Council with the goal of cutting child poverty in half by 2014. Connecticut found only a slight increase in the number of people living in poverty when using the updated calculation — 21,000 people in 2006, compared to 20,000 using the existing Census measure. But it got very different results when determining which public assistance programs did the most to reduce poverty. Under previous assumptions, child care subsidies and adult education and job training were seen as the most highly effective at moving people out of poverty over time. But the new formula showed that increasing enrollment in programs such as food stamps, energy assistance and subsidized housing was a more effective way to reduce child poverty in the near term. As a result, the state redoubled its outreach efforts to sign up as many low-income families as possible for these federally-funded programs. In Minnesota, where the results were similar, a bipartisan legislative committee recommended the state refine its definition of poverty, build public awareness, and carefully monitor the impact of all major legislation on existing anti-poverty programs. Both states joined 12 others earlier this year in calling on the federal government to adopt an NAS-like formula that would “consider the increased financial burden of housing, child care, and health care on the modern American family while recognizing the benefit of critical work supports such as tax credits, food stamps, and other non-cash subsidies.” The administration’s supplemental poverty measure remains controversial, and some leaders on both ends of the political spectrum are urging Congress and the administration not to adopt the new formula for purposes of allocating federal funding or determining individual eligibility anytime soon. If used to parse federal grants among states, it could radically change the amount of money each state receives. It stands to reason, for example, that a family of four trying to make it on $22,000 would have an easier time in rural Alabama than they would in suburban Massachusetts. And should the new measure be used to set individual eligibility for safety net programs, some are fearful that current recipients would be disqualified if all of their federal and state benefits were counted. The French economy ground to a halt in the second quarter of this year, the latest figures have revealed, stoking fears that the world could be plunging into a new recession. Figures released by Insee, France's state statistics agency, showed that country's economy had delivered zero growth, against expectations of a 0.2 per cent rise. The poor performance in the eurozone's second largest economy came off the back of a 0.7 per cent slump in consumer spending and flat exports over the second quarter. Going down: A broker works in a trading room in Paris, where the state statistics agency has reported a quarter of zero growth The data will come as a blow to the government of President Nicolas Sarkozy, which has come under intense pressure from rumours that French sovereign debt was set to lose its coveted AAA status. Despite the worse-than-expected figures, Francois Baroin, the finance minister, insisted he was confident France would meet its target of 2 per cent growth this year. 'It's not a surprise that the second quarter is worse than the first, we anticipated this,' he told French radio station RTL. He added that the government is sticking with its deficit reduction targets despite the lower growth. Reassurances: Francois Baroin, the finance minister, insisted France would meet annual growth targets Flagging growth may mean France has to come up with new budget cuts if it is to bring its deficit down to 5.7 per cent this year as planned. Meeting the target is critical to the country maintaining its gold-plated credit rating. Views on the weak performance were mixed, with warnings that a stagnant economy will make it harder to reduce the deficit. 'As for France itself, Q2's 0.7 percent drop in consumer spending was the sharpest in nearly 15 years, suggesting that the household sector can no longer be relied upon to support the economy,' said Jennifer McKeown, an economist at Capital Economics in London. However, Laurence Boone of Bank of America Merrill Lynch remained 'positive on France overall' based on its careful handling of debt in the past. 'Gradual reforms should bear fruit in coming years, but more needs to be done,' Boone said. News that French economic growth sputtered to a halt in the second quarter raised fresh concerns that the European economy is being affected by the debt crisis ravaging its smaller economies. Separate figures from Eurostat, the EU's statistics office, showing that industrial production across the 17-country eurozone fell by 0.7 percent are likely to add to market concerns over the pace of the economic recovery in Europe. In Greece, where Europe's debt crisis began, statistics released today showed the country mired in a deep recession. Its economy contracted by 6.9 per cent in the second quarter compared to the same period last year, on lower consumer spending. And in Italy, Premier Silvio Berlusconi's government is holding an emergency meeting Friday to approve new measures to balance the budget by 2013 and calm market concerns over Italy's public finances.   Last time things were this bad, Jimmy Carter was president and Blondie was top of the charts. Consumer confidence has dropped sharply this month as it fell to its lowest level since May 1980 with fears growing of a stalled recovery - but Wall Street markets still finished the day up. But there was also good news today as retail sales posted promising gains and all three major U.S. stock markets were up by one per cent today after a wild week of swings on Wall Street in New York. Unhappy shoppers: Consumer confidence has dropped sharply this month as it fell to its lowest level since 1980 as fears grow of a stalled recovery combined with despair over government policies, a survey said Pensive: High unemployment, stagnant wages and the protracted debate over raising the U.S. government debt ceiling have spooked consumers as they fear for the future of the American economy The overall index on consumer sentiment fell to 54.9 for this month’s preliminary reading by Thomson Reuters and the University of Michigan - down almost ten points from 63.7 last month. This was the lowest figure since May 1980, far below analysts’ median forecast of 63 and taken before Standard and Poor's downgraded the U.S. government's credit rating last Friday. High unemployment, stagnant wages and the protracted debate over raising the U.S. government debt ceiling have spooked consumers as they fear for the future of the American economy. ‘Never before in the history of the surveys have so many consumers spontaneously mentioned negative aspects of the government's role,’ survey director Richard Curtin said. ‘This was more than the simple recognition that traditional monetary and fiscal policy measures were largely spent. It was the realisation that the government was unable or unwilling to act.’ Busy day: Specialist Frank Masiello, left, works with traders at the New York Stock Exchange on Friday Up again: A rally in Europe helped boost U.S. stocks this morning, even though trading was still volatile following a short-selling ban on financial shares by France, Italy, Spain and Belgium But U.S. retail sales posted their biggest gain since March last month, a Commerce Department report said, tempering fears the world's largest economy might be slipping back into recession. Sales climbed 0.5 per cent, in line with analyst forecasts and following an upwardly revised 0.3 per cent gain in June, with consumer spending accounting for                                                                                                                                                     Unemployed men queued outside a depression soup kitchen opened in Chicago by Al Capone. The storefront sign reads "Free Soup, Coffee and Doughnuts for the Unemployed." February 1931. (Courtesy of the National Outcasts: Tonight Tens Of Thousands Of Formerly Middle Class Americans Will Be Sleeping In Their Cars, In Tent Cities Or On The Streets Economic despair is beginning to spread rapidly in America.  As you read this, there are millions of American families that are just barely hanging on by their fingernails.  For a growing number of Americans, it has become an all-out battle just to be able to afford to sleep under a roof and put a little bit of food on the table.  Sadly, there are more people than ever that are losing that battle.  Tonight, tens of thousands of formerly middle class Americans will be sleeping in their cars, even though that is illegal in many U.S. cities.  Tens of thousands of others will be sleeping in tent cities or on the streets.  Meanwhile, communities all over America are passing measures that are meant to push tent cities and homeless people out of their areas.  It turns out that once you lose your job and your home in this country you become something of an outcast.  Sadly, the number of "outcasts" is going to continue to grow as the U.S. economy continues to collapse. Most Americans that end up living in their cars on in tent cities never thought that it would happen to them. An article in Der Spiegel profiled one American couple that is absolutely shocked at what has happened to them.... Chanelle Sabedra is already on that road. She and her husband have been sleeping in their car for almost three weeks now. "We never saw this coming, never ever," says Sabedra. She starts to cry. "I'm an adult, I can take care of myself one way or another, and same with my husband, but (my kids are) too little to go through these things." She has three children; they are nine, five and three years old. "We had a house further south, in San Bernardino," says Sabedra. Her husband lost his job building prefab houses in July 2009. The utility company turned off the gas. "We were boiling water on the barbeque to bathe our kids," she says. No longer able to pay the rent, the Sabedras were evicted from their house in August. How would you feel if you had a 3 year old kid and a 5 year old kid and you were sleeping in a car? Sadly, if child protective services finds out about that family those kids will probably be stolen away and never returned. America is becoming a very cruel place. Unfortunately, what has happened to that family is not an isolated incident.  As rampant unemployment has spread across America, the number of people that have lost their homes has soared. Today, it is estimated that approximately a third of the homeless population in Seattle live in their cars. It is even happening to my readers.  A reader named JD left the following comment on one of my articles a while back.... I was laid off from my construction job almost 2 yrs ago was on unenjoyment for over a yr they cut me off last september so i lost my apartment. Since then ive been couch surfing and hotel hopping. Now i occaisonally sleep in my car. I was lucky enough to have a friend with a lawn care business so i can at least put ever increasing gas in my car\house. I hate to say it but i think we will see hoovervilles in the major cities soon. When the welfare & food stamps & all the other govt. programs end the anarchy begins. Desperation is rising all over America.  Most people had hoped to see an economic recovery by now but it just hasn't happened. The phenomenon of Americans living in their cars has become so prominent that even Time Magazine has done a story about it.... For people who cannot afford rent, a car is the last rung of dignity and sanity above the despair of the streets. A home on wheels is a classic American affair, from the wagon train to the RV. Now, for some formerly upwardly mobile Americans, the economic storm has turned the backseat or the rear of the van into the bedroom. "We found six people sleeping in their cars on an overnight police ride-along in December," says John Edmund, chief of staff to Long Beach councilman Dee Andrews. "One was a widow living in a four-door sedan. She and her husband had been Air Force veterans. She did not know about the agencies that could help her. I had tears in my eyes afterwards." Unfortunately, it turns out that sleeping in cars has been made illegal in many areas of the United States. In many cities, police are putting boots on the cars and when the homeless owners can't pay the fines the vehicles are being taken away from them. Venice, California is one place where people have been arrested for living in vehicles.  Venice had been a popular spot for people living in their RVs to go, but police started arresting people that were living in RVs and they began towing away their vehicles. The following is an excerpt from an article that appeared on the Daily Kos website.... They took Eric while he was changing his battery in his car. Claimed he lived in his car. A few days later they went to 3th Street and took his RV because he was in jail and no one moved it for 72 hours. Saturday they did a sweep of 7th and took Bear and his RV. They also took Elizabeth's RV but do not know if they took Elizabeth but can not find her. The police went to 6th and took the white RV that always parks by Broadway on 6th. Everyday they take 1 to 4 RVs. Very soon there will be no one left. Once you are down on your luck in America you will quickly find that authorities will try to take everything else you still have away from you. The United States can be a very brutal place to be if you are poor. All over America, communities are making tent cities illegal or they are simply just chasing them away. It turns out that many Americans really don't like large numbers of homeless people camping out in their neighborhoods. But many of those now living in tent cities used to be just like you and me. What is being done to tent cities in some areas of the country is absolutely disgusting. For example, who could ever forget this video of police in St. Petersburg, Florida using box cutters to slash up the tents of the homeless.... What goes through your mind when you watch something like that? If you don't feel at least a little bit of compassion for those people then something is wrong. You never know - you might be the next one forced to take refuge in a tent city. In many U.S. cities, it is even illegal to sleep on the street.  If you are homeless I am not sure what you are supposed to do.  In some areas of the U.S. you can't sleep in your car, you can't sleep in a tent city and you can't sleep on the street. So what should we do with all of the Americans that are being forced out of their homes by this economy? Should we just round them all up and put them into fenced camps? Don't laugh - we are getting closer to that kind of thing every day. We live in very frightening times. Poverty is absolutely exploding in America.  The number of Americans that are going to food pantries and soup kitchens has increased by 46% since 2006.  There are 44 million Americans on food stamps.  If it was not for measures like these, the streets of America would be filled with destitute people. Things are tough out there and they are about to get tougher. At the beginning of next year, the extended unemployment benefits that have been helping the unemployed during this economic downturn will expire.  Up to now, many unemployed Americans have been able to enjoy up to 99 weeks of unemployment benefits.  Now that is coming to an end. According to the New York Times, this is going to drain 37 billion dollars out of the wallets of unemployed Americans that are just barely hanging on. What in the world is that going to do to the economy? This all comes at a time when it looks like unemployment is going to start rising once again. Cisco has just announced that they are going to be laying off 10,000 workers.  Other large firms are expected to announce more layoffs shortly.  The number of good jobs continues to shrink. There are other signs that the economy is slowing once again.  Pre-orders for Christmas toys are way down.  Vacancies at U.S. shopping malls are rising again.  Nearly every major poll shows that Americans are extremely pessimistic about the economy right now. So why in the world is all of this happening? Where in the world did all of our jobs go? Well, it turns out that millions of our jobs have been shipped overseas where the labor is far, far cheaper and it is really starting to catch up with us. On The American Dream website, I just finished an article entitled "How Globalism Has Destroyed Our Jobs, Businesses And National Wealth In 10 Easy Steps".  It is a 2500 word essay that explains how globalization has absolutely gutted our economy.  The article will hopefully help you understand why so many good jobs have left the United States and why they aren't coming back. Many of our great cities that used to be the envy of the entire globe are now a bad joke to the rest of the world. The following is what one reporter from the UK found when he visited one of the worst areas of Detroit.... Occasionally a half-ruined or half-burned house still stands to remind you that this used to be a cityscape. Pathetic, besieged knots of surviving homes remind you of what was once here. Sometimes amazing efforts have been made to keep them smart. More often, they haven’t. Many bear menacing notices warning visitors to stay away. On the door of one, easy to imagine as a neat home with an iron-pillared porch where the head of the family must once have sat on summer evenings, are the words ‘Enter at ya own risk’ accompanied by a crude drawing of an angry face. I ventured into a nearby ruin, smashed, charred and half-filled with garbage. You have no idea who or what might be lurking in these houses. But don't laugh at Detroit.  What is happening in Detroit is coming to your area soon enough. America is in an advanced state of decay.  The number of "outcasts" is going to multiply as more Americans lose their jobs and their homes.  Millions more Americans will be sleeping in their cars, in tent cities or on the streets before this is all over. The U.S. economy is never going to get back to "normal".  What we are living through now is the "new normal" and it is rip-roaring prosperity compared to what is coming. Please show compassion to the people around you that are hurting right now. You never know, as the economy continues to unravel it may be you that needs some compassion soon. Barack Obama has compared the left-leaning Occupy Wall Street protests sweeping the country to the right-wing Tea Party movement, saying the two groups are 'not that different'. The President, speaking during the second-day of a three-day tour to promote his ideas for creating jobs, also called for Americans to put pressure on Republican members of Congress to support his legislation, declaring: 'We are in this together.' Addressing the anti-corporation demonstrators currently camped in Wall Street and beyond, Mr Obama told ABC: 'I understand the frustrations being expressed in those protests.' Similar: Barack Obama, pictured today, said in an interview with ABC, that the Occupy Wall Street protest is 'not that different' to the Tea Party movement Understanding: Mr Obama said the most important thing for political leaders was to 'understand' the frustrations of the protesters, pictured today in Zuccotti Park 'In some ways, they’re not that different from some of the protests that we saw coming from the Tea Party,' he added during the interview for Nightline conducted in Jamestown, North Carolina. 'Both on the left and the right, I think people feel separated from their government. They feel that their institutions aren’t looking out for them.' The President, himself a target of protester anger over bank bailouts and a failure to jumpstart the economy, added that it was crucial leaders demonstrated they 'understand' the frustration voiced and their desire for change. 'The most important thing we can do right now is those of us in leadership letting people know that we understand their struggles and we are on their side, and that we want to set up a system in which hard work, responsibility, doing what you’re supposed to do, is rewarded,' he said. Presidential 'campaign': Mr Obama, seen holding a child at the Guilford Technical Community College in North Carolina today, is in full election swing 'And that people who are irresponsible, who are reckless, who don’t feel a sense of obligation to their communities and their companies and their workers that those folks aren’t rewarded.' In a different address, at a community college in Jamestown, the President appealed anew for Americans to exert pressure on Republicans in Congress to support his jobs bill. And Mr Obama, who has been asked why he is taking time to ride a bus through small-town North Carolina, said he hit the road to take his case directly to the people for a simple reason: 'I'm the President.' Famous friends: Actress Susan Sarandon out in New York yesterday as she showed her support by joining a rally by the Occupy Wall Street protest movement On my side: A teamster looks delighted to hand his jacket to actress Susan Sarandon as she stepped out at Sotheby's in New York to support their protest to a lockout of union art handlers over a contract dispute 'I'm not the Democratic president or the Republican president,' Mr Obama told a crowd at a YMCA on the campus of Guilford Technical Community College. 'I don't care if you're a Republican or a Democrat because we're all Americans.' Although Republicans blocked his $447 billion jobs plan in the Senate, Mr Obama is continuing an aggressive effort to rally public support for his ideas and to portray Republicans as the ones standing in the way of creating jobs at a time of high unemployment. 'We don't need a Republican jobs act or a Democratic jobs act. We need a jobs act,' the president said in North Carolina today, a traditionally Republican state that he won in 2008 and hopes to win again. 'We need to put people back to work right now.' Anger: Mr Obama has been the target of protester ire over his role in the bank bailouts, but he wanted to express his backing for their views He has said that lawmakers will break up the bill and vote on its individual components. Mr Obama said the ideas in his jobs bill previously have been supported by lawmakers in both parties. 'What makes it different this time other than that I proposed it,' he asked. Mr Obama is using the road trip, which also takes in Virginia, not only to test out a sharper, more populist message as he seeks a second term but also to gauge whether the two traditionally conservative states he won in the 2008 election can stay in his column in 2012. All indications are it could be a daunting task for Mr Obama, whose poll numbers have fallen to the lows of his presidency amid public discontent over the stalled U.S. economy and high unemployment. One of Obama's most high-profile supporters, the actress Susan Sarandon, joined the Occupy Wall Street protesters in New York yesterday, pulling on the jacket of one Teamster who had joined the demonstration. Occupy Wall Street protesters had joined with Teamsters at actions against Sotheby's, which has locked out art handlers for two months, and Verizon, which is in tense negotiations for a contract covering 45,000 workers. 'All in this together': Mr Obama called for Americans to put pressure on Republicans over his jobs legislation, the same day businessmen were pictured passing a sign featuring Mahatma Ghandi in the Occupy D.C. camp As Mr Obama's black armoured bus rolled along, there was little denying the shift into full campaign mode in what political experts see as must-win states for him next year. Speeches to wildly cheering North Carolina crowds on an airport tarmac and in a high school gym on Monday, the start of his three-day tour, were marked by full-throated attacks on Republicans he exhorted to 'do the right thing' on jobs. There were choreographed stops, like Mr Obama buying Halloween candy at a family-owned general store, and presidential moments, like when he lifted a one-year-old from his mother's arms and pronounced him a 'good-looking boy.' But poll numbers are not so positive. A recent Elon University survey put Mr Obama's approval rating at 42 per cent in North Carolina, where Democrats will convene their presidential convention next summer.   Faro and Doris Caudill, homesteaders. Pie Town, New Mexico, October 1940. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress Now: The Economist: Global Debt Clock Now $42T And Ticking     The clock is ticking. Every second, it seems, someone in the world takes on more debt.  The idea of a debt clock for an individual nation is familiar to anyone who has been to Times Square in New York, where the American public shortfall is revealed.  Our clock shows the global figure for all (or almost all) government debts in dollar terms. Does it matter? After all, world governments owe the money to their own citizens, not to the Martians. But the rising total is important for two reasons.  First, when debt rises faster than economic output (as it has been doing in recent years), higher government debt implies more state interference in the economy and higher taxes in the future.  Second, debt must be rolled over at regular intervals. 2 Connecticut town on the sea. Stonington, Connecticut, November 1940. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress Now: Farm auction. Derby, Connecticut, September 1940. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress 3 4 Children gathering potatoes on a large farm. Vicinity of Caribou, Aroostook County, Maine, October 1940. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress 5 Trucks outside of a starch factory. Caribou, Aroostook County, Maine, October 1940. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress 6 Headlines posted in street-corner window of newspaper office (Brockton Enterprise). Brockton, Massachusetts, December 1940. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress 7 Children in the tenement district. Brockton, Massachusetts, December 1940. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress 8 Going to town on Saturday afternoon. Greene County, Georgia, May 1941. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress 9 Chopping cotton on rented land near White Plains. White Plains, Greene County, Georgia, June 1941. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress   10 Barker at the grounds at the state fair. Rutland, Vermont, September 1941. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress   11 Backstage at the "girlie" show at the state fair. Rutland, Vermont, September 1941. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress   12 At the Vermont state fair. Rutland, Vermont, September 1941. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress 13 Couples at square dance. McIntosh County, Oklahoma, 1939 or 1940, Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress 14 Orchestra at square dance. McIntosh County, Oklahoma, 1939 or 1940. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress 15 Children asleep on bed during square dance. McIntosh County, Oklahoma, 1939 or 1940. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress     16 Jack Whinery, homesteader, and his family. Pie Town, New Mexico, October 1940. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress 17 The Faro Caudill family eating dinner in their dugout. Pie Town, New Mexico, October 1940. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress 18 Saying grace before the barbeque dinner at the New Mexico Fair. Pie Town, New Mexico, October 1940. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress   19 Homesteader and his children eating barbeque at the New Mexico Fair. Pie Town, New Mexico, October 1940. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress 20 School children singing. Pie Town, New Mexico, October 1940. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress 21 Garden adjacent to the dugout home of Jack Whinery, homesteader. Pie Town, New Mexico, September 1940. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress   22 Mill at the Camp Bird Mine. Ouray County, Colorado, October 1940. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress 23 Distributing surplus commodities. St. Johns, Arizona, October 1940. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress 24 Hauling crates of peaches from the orchard to the shipping shed. Delta County, Colorado, September 1940. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress 25 Hay stack and automobile of peach pickers. Delta County, Colorado, 1940. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress 26 On main street of Cascade. Cascade, Idaho, July 1941. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress 27 Road cut into the barren hills which lead into Emmett. Emmett, Idaho, July 1941. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress 28 Shasta dam under construction. California, June 1942. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress 29 Boy building a model airplane as girl watches. Robstown, Texas, January 1942. Reproduction from color slide. Photo by Arthur Rothstein. Prints and Photographs Division, Library of Congress 30 Grand Grocery Company. Lincoln, Nebraska, 1942. Reproduction from color slide. Photo by John Vachon. Prints and Photographs Division, Library of Congress 31 Young African American boy. Cincinnati, Ohio, 1942 or 1943. Photo by John Vachon. Prints and Photographs Division, Library of Congress 32 Wisdom, Montana, April 1942. Reproduction from color slide. Photo by John Vachon. Prints and Photographs Division, Library of Congress 33 A Fourth of July celebration. St. Helena Island, South Carolina, 1939. Reproduction from color slide. Photo by Marion Post Wolcott. Prints and Photographs Division, Library of Congress 34 Planting corn along a river. Northeastern Tennessee, May 1940. Reproduction from color slide. Photo by Marion Post Wolcott. Prints and Photographs Division, Library of Congress 35 African Americans fishing in creek near cotton plantations. Belzoni, Mississippi, October 1939. Reproduction from color slide. Photo by Marion Post Wolcott. Prints and Photographs Division, Library of Congress 36 Bayou Bourbeau plantation, a Farm Security Administration cooperative. Vicinity of Natchitoches, Louisiana, August 1940. Reproduction from color slide. Photo by Marion Post Wolcott. Prints and Photographs Division, Library of Congress 37 African American's tenant's home beside the Mississippi River levee. Near Lake Providence, Louisiana, June 1940. Reproduction from color slide. Photo by Marion Post Wolcott. Prints and Photographs Division, Library of Congress 38 A crossroads store, bar, "juke joint," and gas station in the cotton plantation area. Melrose, Louisiana, June 1940. Reproduction from color slide. Photo by Marion Post Wolcott. Prints and Photographs Division, Library of Congress 39 Boys fishing in a bayou. Schriever, Louisiana, June 1940. Reproduction from color slide. Photo by Marion Post Wolcott. Prints and Photographs Division, Library of Congress 40 A store with live fish for sale. Vicinity of Natchitoches, Louisiana, July 1940. Reproduction from color slide. Photo by Marion Post Wolcott. Prints and Photographs Division, Library of Congress 41 African American migratory workers by a "juke joint". Belle Glade, Florida, February 1941. Reproduction from color slide. Photo by Marion Post Wolcott. Prints and Photographs Division, Library of Congress 42 Children aiming sticks as guns, lined up against a brick building. Washington, D.C.(?), between 1941 and 1942. Reproduction from color slide. Photographer Unknown. Prints and Photographs Division, Library of Congress 43 Shulman's market, on N at Union Street S.W. Washington, D.C., between 1941 and 1942. Reproduction from color slide. Photo by Louise Rosskam. Prints and Photographs Division, Library of Congress 44 House. Washington, D.C.(?), between 1941 and 1942. Reproduction from color slide. Photo by Louise Rosskam. Prints and Photographs Division, Library of Congress 45 Chapel, Vadito. Near Penasco, New Mexico, Spring 1943. Reproduction from color slide. Photo by John Collier. Prints and Photographs Division, Library of Congress 46 A welder who works in the round-house at the Chicago and Northwestern Railway Company's Proviso yard. Chicago, Illinois, December 1942. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress 47 View in a departure yard at Chicago and Northwestern Railway Company's Proviso yard at twilight. Chicago, Illinois, December 1942. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress 48 Switchman throwing a switch at Chicago and Northwest Railway Company's Proviso yard. Chicago, Illinois, April 1943. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress 49 Mike Evans, a welder, at the rip tracks at Proviso yard of the Chicago and Northwest Railway Company. Chicago, Illinois, April 1943. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress 50 Putting the finishing touches on a rebuilt caboose at the rip tracks at Proviso yard. Chicago, Illinois, April 1943. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress 51 Switch engine in yard near Calumet Park stockyards, Indiana Harbor Belt Railroad. Calumet City, Illinois, January 1943. Photo by Jack Delano. Prints and Photographs Division, Library of Congress 52 General view of part of the South Water Street freight depot of the Illinois Central Railroad Chicago, Illinois, May 1943. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress 53 Mrs. Viola Sievers, one of the wipers at the roundhouse giving a giant "H" class locomotive a bath of live steam. Clinton, Iowa, April 1943. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress 54 Women workers employed as wipers in the roundhouse having lunch in their rest room, Chicago and Northwest Railway Company. Clinton, Iowa, April 1943. Reproduction from color slide. Photo by Jack Delano. Prints and Photographs Division, Library of Congress 55 Children stage a patriotic demonstration. Southington, Connecticut, May 1942. Reproduction from color slide. Photo by Fenno Jacobs. Prints and Photographs Division, Library of Congress 56 At Beecher Street School. Southington, Connecticut, May 1942. Reproduction from color slide. Photo by Fenno Jacobs. Prints and Photographs Division, Library of Congress 57 Street corner. Dillon, Montana, August 1942. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress 58 Shepherd with his horse and dog on Gravelly Range Madison County, Montana, August 1942. Reproduction from color slide. Photo by Russell Lee. Prints and Photographs Division, Library of Congress 59 Servicing an A-20 bomber. Langley Field, Virginia, July 1942. Reproduction from color slide. Photo by Alfred T. Palmer. Prints and Photographs Division, Library of Congress 60 Marine glider at Page Field. Parris Island, South Carolina, May 1942. Reproduction from color slide. Photo by Alfred T. Palmer. Prints and Photographs Division, Library of Congress 61 M-4 tank crews of the United States. Fort Knox, Kentucky, June 1942. Reproduction from color slide. Photo by Alfred T. Palmer. Prints and Photographs Division, Library of Congress 62 Welder making boilers for a ship, Combustion Engineering Company. Chattanooga, Tennessee, June 1942. Reproduction from color slide. Photo by Alfred T. Palmer. Prints and Photographs Division, Library of Congress 63 Construction work at the TVA's Douglas Dam. Tennessee, June 1942. Reproduction from color slide. Photo by Alfred T. Palmer. Prints and Photographs Division, Library of Congress 64 Assembling B-25 bombers at North American Aviation. Kansas City, Kansas, October 1942. Reproduction from color slide. Photo by Alfred T. Palmer. Prints and Photographs Division, Library of Congress Now: CHART: U.S. Military Spending Vs. The World   The increase in 2010 is almost entirely down to the United States, which accounted for $19.6 billion of the $20.6 billion real-terms increase.  Excluding the U.S., the total in the ‘rest of the world’ barely changed in 2010, increasing by a statistically insignificant 0.1 per cent. Greg Scoblete summarizes the rest of the world: The Stockholm International Peace Research Institute has a new report out highlighting global military expenditures.  As the above chart indicates, the U.S. retains a healthy lead. Regionally, defense spending in Europe has fallen 2.8 percent while spending in South America has risen by 5.8 percent and in Africa by 5.2 percent. Brazil drove a lot of the South American growth. Asia rose only a modest 1.4 percent, which the Institute said was slower than previous years. Overall, global military expenditures ticked up slightly at 1.3 percent, the slowest growth rate since 2001. 65 P-51 'Mustang' fighter in flight. Inglewood, California, October 1942. Reproduction from color slide. Photo by Alfred T. Palmer. Prints and Photographs Division, Library of Congress Now: An F-35 Lightning II fighter jet makes a test flight over Fort Worth, Texas. Photographer: Lockheed Martin/US Air Force via Bloomberg News It may cost as much as $1 trillion to operate the military’s fleet of Lockheed Martin Corp. (LMT) F-35 aircraft for several decades, according to a preliminary Pentagon estimate sent to Congress. The figure is 9.3 percent more than the $915 billion estimate by the Defense Department in its 2009 Selected Acquisition Report to Congress. The long-term cost estimate, which includes inflation, was submitted to Congress on April 15 in a report obtained by Bloomberg News. It assumes 8,000 hours of flying time for each of the 2,443 aircraft over a 30-year period. The Air Force, Navy and Marine Corps have their own variations of the aircraft, with the last in the fleet to be produced in 2035. The estimate was calculated by the Pentagon’s independent cost analysis group based on models using historical data from other fighters, David Van Buren, Air Force service acquisition executive, said in an interview today. “We are taking the challenge” posed by the $1 trillion estimate and “saying we’ve got to drive this down fast,” said Van Buren, who oversees F-35 management. “Do we drive down it down based on reliability projections? Do we drive it down based on technologies that we developed for the F-35” that reflect lessons learned from the F-22, he said? Older Aircraft For example, the latest estimate assumes that F-35 components will break more frequently than older aircraft, he said. The Pentagon is trying to develop “a more refined number,” he said. The $1 trillion estimate is in addition to an estimated $382 billion in development and production costs. The long-term maintenance estimates were projected based on costs incurred to support the military’s fleet of F-16s, F/A- 18s, and AV-8B Harrier jets, the Pentagon said in its report Almost all government, analyst and media attention on the Pentagon’s biggest program has focused on cost growth and technical issues in the $54 billion systems-engineering phase. The Pentagon’s top weapons official, without citing figures, said yesterday that the military must start focusing on controlling the long-range costs. Sustaining the Fighter “It’s not too early to think of sustainment for the Joint Strike Fighter,” Undersecretary for Acquisition Ashton Carter said yesterday. “Most of the cost of our programs is in ‘having’ them, not in ‘acquiring them,” he said at the Heritage Foundation in Washington. “We are at the point with the Joint Strike Fighter where we have wrestled with the development issues,” Carter said. “We are trying to manage down some of the cost associated with the production, and it’s not too early to look at sustainment, because the projected bills also have increased.” The Pentagon’s Cost Analysis and Program Evaluation group is updating its $1 trillion figure for a major F-35 review next month intended to revise all of the program’s costs, including overrun estimates on the first three low-rate aircraft production and engine contracts, according to the report to Congress. The greatest depression in human history is still in its starting stages. What the media and many officials often refer to as the "hangover" from the global financial crisis is in fact the end of the beginning. Originating in 2008, the global economic crisis took the world by storm: banks collapsed, the "too big to fail" became bigger by consolidating the rest, governments bailed out their financial industries, masses of people lost their jobs, the 'developing' world was plunged into a deep systemic crisis, food prices rose, which in time spurred social unrest; and the Western nations that took on the bad debts of the big banks are on the precipice of a great global debt crisis, originating in Europe, hitting Greece and Spain, but destined to consume the industrialized world itself. Though many claim that we are in a "recovery," things could not be further from the truth. As the mainstream media is finally catching on to the reality of the mirage of the so-called "recovery", reports are surfacing about a dire global economic situation: "Evidence of a deterioration of global manufacturing growth and renewed weakness in job creation in the United States emerged Wednesday, two reversals that have markets bracing for an economic pause, or worse... Add to that a daunting list of aggravating factors: the continued implosion of the U.S. housing market, an outbreak of worldwide risk aversion, high crude-oil and gas prices pinching consumer demand, further tightening in China and other emerging-market economies, stock market losses, lack of credit growth, the looming end to the Fed’s monetary stimulus, weak business capital spending, and the still-unfolding sovereign debt crisis in Europe." And now top financial experts are warning of a new financial crisis altogether, since the monstrous derivatives market that played such a nefarious role in the preceding crisis has not been altered, nor have its systemic risks been addressed. The derivatives market - essentially a fictional electronic market of high-stakes gambling - has a value ten times that of the entire global gross national product of the world's countries combined. This market is dominated by hedge funds and the "too big to fail" banks, who in fact created the derivatives trading schemes. As one leading hedge fund manager recently stated, "There is definitely going to be another financial crisis around the corner... because we haven’t solved any of the things that caused the previous crisis." The market for derivatives is somewhere in the realm of $600 trillion. Now: CHART: U.S. Military Spending Vs. The World   The increase in 2010 is almost entirely down to the United States, which accounted for $19.6 billion of the $20.6 billion real-terms increase.  Excluding the U.S., the total in the ‘rest of the world’ barely changed in 2010, increasing by a statistically insignificant 0.1 per cent. Greg Scoblete summarizes the rest of the world: The Stockholm International Peace Research Institute has a new report out highlighting global military expenditures.  As the above chart indicates, the U.S. retains a healthy lead. Regionally, defense spending in Europe has fallen 2.8 percent while spending in South America has risen by 5.8 percent and in Africa by 5.2 percent. Brazil drove a lot of the South American growth. Asia rose only a modest 1.4 percent, which the Institute said was slower than previous years. Overall, global military expenditures ticked up slightly at 1.3 percent, the slowest growth rate since 2001. 66 Woman is working on a "Vengeance" dive bomber Tennessee, February 1943. Reproduction from color slide. Photo by Alfred T. Palmer. Prints and Photographs Division, Library of Congress 67 Hanna furnaces of the Great Lakes Steel Corporation, stock pile of coal and iron ore. Detroit, Michigan, November 1942. Reproduction from color slide. Photo by Arthur Siegel. Prints and Photographs Division, Library of Congress 68 Rural school children. San Augustine County, Texas, April 1943. Reproduction from color slide. Photo by John Vachon. Prints and Photographs Division, Library of Congress 69 Rural school children. San Augustine County, Texas, April 1943. Reproduction from color slide. Photo by John Vachon. Prints and Photographs Division, Library of Congress 70 Worker at carbon black plant. Sunray, Texas, 1942. Reproduction from color slide. Photo by Worker at carbon black plant John Vachon. Prints and Photographs Division, Library of Congress

 

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