Central Perk

sâmbătă, 9 august 2014

Mish's Global Economic Trend Analysis

Scathing Anti-West Editorial in German Handelsblatt; Reader Emails on "Small Price to Pay"

Posted: 09 Aug 2014 01:10 PM PDT

Yesterday, a reader told me about a must-read article in the German financial newspaper Handelsblatt.

Having no details other than it was a"must read" I failed to locate the article after attempting translations of the Handelsblatt home page.

Zero Hedge did find the article, entitled "West on the Wrong Path".

It turns out, there is a version of the editorial in German, English, and Russian.

Citing parallels to WWI, author Gabor Steingart, publisher of Handelsblatt, Germany's leading financial newspaper, blasts the Western response (especially US and German) response to the situation in Ukraine.

"Small Price to Pay" vs. "West on the Wrong Path"

Interestingly, Steingart's article is nearly identical in tone and message to my article "Small Price to Pay".

Steingart kicks off with "Every war is accompanied by a kind of mental mobilization: war fever. Even smart people are not immune to controlled bouts of this fever."

Steingart is precisely correct. The War in Vietnam, and the War in Iraq are cases in point. Both were based on lies, distortions, gross underplay of risks, and gross overplay of concerns.

Consider the ridiculous Vietnam "Domino Theory" and the trump-up of WOMD concern of Bush when it turns out Hussein did not have any.

History Repeating?

Steingart continues ...

We interrupt our own train of thought: "History is not repeating itself!" But can we be so sure about that these days? In view of the war events in the Crimean and eastern Ukraine, the heads of states and governments of the West suddenly have no more questions and all the answers. The US Congress is openly discussing arming Ukraine. The former security advisor Zbigniew Brzezinski recommends arming the citizens there for house-to-house and street combat. The German Chancellor, as it is her habit, is much less clear but no less ominous: "We are ready to take severe measures."

The Tagesspiegel: "Enough talk!" The FAZ: "Show strength". The Süddeutsche Zeitung: "Now or never." The Spiegel calls for an "End to cowardice": "Putin's web of lies, propaganda, and deception has been exposed. The wreckage of MH 17 is also the result of a crashed diplomacy."

Many Questions, Few Answers

I raised a number of questions. Steingart did the same.

Did it all start with the Russian invasion of the Crimean or did the West first promote the destabilization of the Ukraine? Does Russia want to expand into the West or NATO into the East? Or did maybe two world-powers meet at the same door in the middle of the night, driven by very similar intentions towards a defenseless third that now pays for the resulting quagmire with the first phases of a civil war?

Hitler Card

I noted a close friend played the "Hitler Card". Steingart discusses the issue as well.

When Hillary Clinton compares Putin with Hitler, she does so only to appeal to the Republican vote, i.e. people who do not own a passport. For many of them, Hitler is the only foreigner they know, which is why Adolf Putin is a very welcome fictitious campaign effigy. In this respect, Clinton and Obama have a realistic goal: to appeal to the people, to win elections, to win another Democratic presidency.

Angela Merkel can hardly claim these mitigating circumstances for herself. Geography forces every German Chancellor to be a bit more serious.

Self-Inflicted Punishment

Free trade by definition, is a good thing. Both sides benefit or they would not enter into the trade. It stands to reason, sanctions must be a bad thing. Both sides get hurt.

By the way what did the US achieve with sanctions on Iran other than raise the prices of gasoline for everyone and make enemies with the Iranian people?

Steingart elegantly states the case.

Even the idea that economic pressure and political isolation would bring Russia to its knees was not really thought all the way through. Even if we could succeed: what good would Russia be on its knees? How can you want to live together in the European house with a humiliated people whose elected leadership is treated like a pariah and whose citizens you might have to support in the coming winter.

My friend says sanctions are a "small price to pay".

For whom? For the farmer who is stuck with rotting produce he cannot sell? For the Russian citizen who has to suffer with higher prices?

No, I'll tell you who pays the small price: It's the warmonger who benefits from artificial demand for guns and ammo.

Everyone else pays a huge price.

Legal vs. Reality

Just consider what Willy Brandt had to listen to when his fate as mayor of Berlin placed him in the shadow of the wall. What sanctions and punishments were suggested to him. But he decided to forgo this festival of outrage. He never turned the screw of retribution.

When he was awarded the Noble Prize for Peace he shed light on what went on around him in the hectic days when the wall was built: "There is still another aspect – that of impotence disguised by verbalism: taking a stand on legal positions which cannot become a reality and planning counter-measures for contingencies that always differ from the one at hand. At critical times we were left to our own devices; the verbalists had nothing to offer."

With the advice from Egon Bahr, he [Brandt] accepted the new situation, knowing that no amount of outrage from the rest of the world would bring this wall down again for a while. He even ordered the West-Berlin police to use batons and water cannons against demonstrators at the wall in order not to slip from the catastrophe of division into the much greater catastrophe of war. He strove for the paradox which Bahr put as follows later: "We acknowledged the Status Quo in order to change it."

My friend lives in the contradictory world where international legalities must be enforced to preserve peace, even if enforcement means war.

History clearly shows the folly of such beliefs.

Case for Mediation Without the US

Several times recently I called for all involved to get together and talk. By "all involved" I meant the EU, Russia, Ukraine, and the rebels.

The US has no legitimate role in this mess, although it helped start it.

Europe can come to a reasonable solution far easier without the US than with it.

Steingart also wants talk, not war, correctly calling the status quo of sanctions and retaliations a "dead end".

Dead End Policies

It is not too late for the duo Merkel/Steinmeier to use the concepts and ideas of this time. It does not make sense to just follow the strategically idea-less Obama. Everyone can see how he and Putin are driving like in a dream directly towards a sign which reads: Dead End.

"The test for politics is not how something starts but how it ends", so Henry Kissinger, also a Peace Nobel Prize winner. After the occupation of the Crimean by Russia he stated: we should want reconciliation, not dominance. Demonizing Putin is not a policy. It is an alibi for the lack thereof.

At the moment (and for a long time before that) America is doing the opposite. All conflicts are escalated. The attack of a terror group named Al Qaida is turned into a global campaign against Islam. Iraq is bombed using dubious justifications. Then the US Air Force flies on to Afghanistan and Pakistan. The relationship to the Islamic world can safely be considered damaged.

If the West had judged the then US government which marched into Iraq without a resolution by the UN and without proof of the existence of "WMDs" by the same standards as today Putin, then George W. Bush would have immediately been banned from entering the EU. The foreign investments of Warren Buffett should have been frozen, the export of vehicles of the brands GM, Ford, and Chrysler banned.

The American tendency to verbal and then also military escalation, the isolation, demonization, and attacking of enemies has not proven effective. The last successful major military action the US conducted was the Normandy landing. Everything else – Korea, Vietnam, Iraq, and Afghanistan – was a clear failure. Moving NATO units towards the Polish border and thinking about arming Ukraine is a continuation of a lack of diplomacy by the military means.

This policy of running your head against the wall – and doing so exactly where the wall is the thickest – just gives you a head ache and not much else. And this considering that the wall has a huge door in the relationship of Europe to Russia. And the key to this door is labeled "reconciliation of interests".

Brandt and Bahr have never reached for the tool of economic sanctions. They knew why: there are no recorded cases in which countries under sanctions apologized for their behavior and were obedient ever after. On the contrary: collective movements start in support of the sanctioned, as is the case today in Russia. The country was hardly ever more unified behind their president than now. This could almost lead you to think that the rabble-rousers of the West are on the payroll of the Russian secret service.

Reader Email on "Small Price to Pay"

I received many emails from readers with all kinds of comments.

Reader "James" writes ...

Hello Mish

Your blog "Small Price to Pay" shows how too big to fail is essentially an ego feeding exercise, on itself, like Goering in prison or any other tyrant. What keeps a tyrant in power are their mercenaries who in turn keep the minions in box cars heading for death in service of the tyrants eternal bliss.

Friends and family, and farmers and traders, all go along with "small price" without ever questioning the overall cost of paying "small prices".

I re-read your fine post and marvel at the number of questions raised and wonder if all have a common answer? Humans apparently have to kill other humans just to feel comfortable being themselves. The thought of exposing their own empty and blank self is just to big a price to pay.

In the name of Christianity and democracy, we kill those who get in the way of what our leaders think is the greater good for all of mankind.

Look at the total destruction of lives and property in Iraq and Vietnam. Supposedly, it was a "small price to pay". For Whom?

Questions of the Day

Anyone recall the estimated cost of the second Iraqi war?

Paul Wolfowitz, assistant to Defense Secretary Donald Rumsfeld said the "war would largely pay for itself".

Inquiring minds may be interested in a US Department of Defense Transcript of Defense Secretary Donald Rumsfeld in January of 2003.

Q: Mr. Secretary, on Iraq, how much money do you think the Department of Defense would need to pay for a war with Iraq?

Rumsfeld: Well, the Office of Management and Budget, has come up come up with a number that's something under $50 billion for the cost. How much of that would be the U.S. burden, and how much would be other countries, is an open question.

$50 billion was surely a "small price to pay" was it not?

Two trillion dollars later, with Isis now in control of much of Iraq, and with the 4th consecutive president taking military action in Iraq, I believe you have the answer.

Negotiation or Escalation?

Will the pragmatists win the day? Will it be negotiation, widening trade war, or escalation into a bigger military war?

History suggests the "Hitler Card" will get played so many times in so many places, and the "small price" downplayed so much that escalation easily wins out over common sense.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Damn Cool Pics

The Worst Prisons From Around The World

Posted: 08 Aug 2014 07:14 PM PDT

If you ever go to prison, you better hope you don't end up in one of these places.

Syndicating Content - Whiteboard Friday

Posted: 08 Aug 2014 04:30 AM PDT

Posted by Eric Enge

It's hard to foresee a lot of benefit to your hard work creating content when you don't have much of a following, and even if you do, scaling that content creation is difficult for any marketer. One viable answer is syndication, and in this Whiteboard Friday, Eric Enge shows you both reasons why you might want to syndicate as well as tips on how to go about it.

Heads-up! We published a one-two punch of Whiteboard Friday videos from our friends at Stone Temple Consulting today. Check out "I See Content (Everywhere)" by Mark Traphagen, too!

For reference, here's a still of this week's whiteboard!

Video transcription

Hi everybody. I'm Eric Enge, CEO of Stone Temple Consulting. Welcome to another edition of Whiteboard Friday, and today we're going to be talking about syndicated content. I probably just smeared my picture, but in any case, you hear about syndicated content and the first thing that comes across your mind is, "Doesn't that create duplicate content, and isn't somebody going to outrank me for my own stuff?" And it is a legitimate concern. But before I talk about how to do it, I want to tell you about why to do it, because there are really, really good sound reasons for syndicating content.

Why (and how) should I syndicate my content?

So first of all, here is your site. You get to be the site in purple by the way, and then here is an authority site, which is the site in green. You have an article that you've written called, "All About Fruit," and you deliver that article to that authority site and they publish the same article, hence creating the duplicate content. So why would you consider doing this?

Well, the first reason is that by association with a higher authority site there is going to be some authority passed to you, both from a human perspective from people that see that your content is up there. They see that your authored content is on this authority site. That by itself is a great thing. When we do the right things, we're also going to get some link juice or SEO authority passed to you as well. So these are really good reasons by itself to do it.

But the other thing that happens is you get exposure to what I call OPA or Other People's Audiences, and that's a very helpful thing as well. These people, as I've mentioned before, they're going to see you here, and this crowd, some of this crowd is going to start to become your crowd. This is great stuff. But let's talk about how to do it. So here we go.

Three ways to contentedly syndicate content

#1 rel=canonical

There are three ways that you can do this that can make this work for you. The first is, here's your site again, here's the authority site. You get the authority site to implement a rel=canonical tag back to your page, the same page, the exact article page on your site. That tells Google and Bing that the real canonical version of the content is this one over here. The result of that is that all of the PageRank that accrues to this page on the authority site now gets passed over to you. So any links, all the links, in fact, that this page gets now gets passed through to you, and you get the PageRank from all that. This is great stuff. But that's just one of the solutions. It's actually the best one in my opinion.

#2 meta noindex

The second best one down here, okay, same scenario -- your site, the authority's site. The authority's site implements a meta no index tag on their page. That's an instruction to the search engine to not keep this page in the index, so that solves the duplicate content problem for you in a different way. This does as well, but this is a way of just taking it out of the index. Now any links from this page here over to your page still pass PageRank. So you still want to make sure you're getting those in the process. So a second great solution for this problem.

#3 Clean Link to Original Article

So these are both great, but it turns out that a lot of sites don't really like to do either of these two things. They actually want to be able to have the page in the index, or they don't want to take the trouble to do this extra coding. There is a third solution, which is not the best solution, but it's still very workable in the right scenarios. That is you get them to implement a clean text link from the copied page that they have on their site over to your site, to the same article on your site. The search engines are pretty good at understanding, when they see that link, that it means that you're the original author. So you're still getting a lot of authority passed, and you're probably eliminating a duplicate content problem.

So again, let's just recap briefly. The reason why you want to go through this trouble is you get authority from the authority site passed to you, both at a human level and at an SEO level, and you can gain audience from the audience of that authority site.

So that's it for this edition of Whiteboard Friday.

Video transcription by Speechpad.com

Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read!

Watch at 10:25 ET: The President Speaks on the Situation in Iraq

Watch Live

The President Speaks on the Situation in Iraq

At 10:25 a.m. ET today, the President will deliver a statement on the situation in Iraq, from the South Lawn of the White House.

TUNE IN LIVE

Featured

Weekly Address: American Operations in Iraq

In this week's address, the President detailed why he authorized two operations in Iraq -- targeted military strikes to protect Americans serving in Iraq, and humanitarian airdrops of food and water to help Iraqi civilians trapped on a mountain by terrorists. The President saluted America's brave men and women in uniform for protecting our fellow Americans and helping to save the lives of innocent people.

The President also made clear that the United States will not be dragged into another war in Iraq -- that American combat troops will not return -- because there is no American military solution to the larger crisis in Iraq.

Click here to watch this week's Weekly Address.

Seth's Blog : A kick in the asterisk

A kick in the asterisk

What's the point of being open 24 hours a day, seven days a week, especially if you get zero calls between 3 am and 4 am?

Why take the risk of offering a no-questions-asked money-back guarantee when you know that a few people are going to show up with ridiculous requests for refunds?

Do you really want to offer an all-you-can-eat buffet? What about the trolls that eat too much? Shouldn't you have limits?

Simple. Because you've just eliminated a reason for people to wonder. They don't have to wonder about your rules or your hours or your fine print, because you took away the doubt.

• Email to a friend •

vineri, 8 august 2014

Mish's Global Economic Trend Analysis

"Small Price to Pay"

Posted: 08 Aug 2014 12:13 PM PDT

In response to Russia Fires Back With More Sanctions: NASA, Pepsi, McDonald's, Autos in Spotlight a close friend responded "It's a small price to pay to counter naked aggression."

Questions

Naked aggression by whom? Who started this mess?
Who fomented the overthrow of former Ukrainian president Viktor Yanukovych.? Was it Russia or the US?
What country reneged on promises to not expand NATO into Eastern Europe? Was it Russia or the US?
What country has satellite coverage of the region and has failed to produce any evidence as to where Buk missile launchers were on the day MH17 crashed? Russia or the US?
What country stood the most to gain from the downing of MH17?
Why was MH17 rerouted far from its normal flight path to fly directly over a war zone?

But what the heck? Let's ignore all those pointed questions. Let's also ignore the Gulf of Tonkin resolution in Vietnam, an asinine war in Iraq, support for "moderate" rebels in Syria who in retrospect turned out to be Isis members, horrific errors in Afghanistan, lies that led us into war with Iraq, US involvement in the overthrow of the Shah of Iran, etc., etc..

And with virtually no evidence presented, please wrap yourself in the US flag, along with president Obama and senator John McCain, and believe every lie the US has to tell.

Why?

Because it's a "small price to pay".

Goering at the Nuremberg Trials

Please recall what Reichsmarschall Hermann Wilhelm Göring (in English his name is also spelled as Hermann Goering) Nazi founder of the Gestapo, Head of the Luftwaffe, said at the Nuremberg Trials.

Here is a clip of the interview in Goering's cell in prison, after the war.

Göring: Why, of course, the people don't want war. Why would some poor slob on a farm want to risk his life in a war when the best that he can get out of it is to come back to his farm in one piece? Naturally, the common people don't want war; neither in Russia nor in England nor in America, nor for that matter in Germany. That is understood. But, after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy or a fascist dictatorship or a Parliament or a Communist dictatorship.

Gilbert: There is one difference. In a democracy, the people have some say in the matter through their elected representatives, and in the United States only Congress can declare wars.

Göring: Oh, that is all well and good, but, voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country.

Well forget all that. Let's also forget about the lack of any evidence to date by the US. Let's instead depend on Ukrainian social media tweets, and be willing to march to war with Russia, China, Iran, anyone and everyone.

Should that happen, don't worry. After all, my friend says "It's a small price to pay".

The Hitler Card

In a subsequent email, my friend played the Hitler Card with this set of statements:

"Invading and annexing sovereign territory and their actions to destabilize a country which violates every major international agreement they have signed relating to the subject since 1945 is a major and egregious. It seems to me little different than Japanese actions in Asia in the early 1930s and German actions in 1938 and German/Russian actions in 1938-39. It is that international system that produced that peace that is now under attack. Letting that system fail would be idiocy and we will not let it happen."

Comparisons to Hitler are inane. My friend should know better. Hitler wanted to exterminate Jews, create a master race, and rule the world.

In contrast, Putin does not want NATO missiles on his doorstep, much like the US did not want them in Cuba.

Ukraine is in the state of civil war. Russia supplies weapons. Did the US supply weapons or aid to rebels in the Syrian civil war? How stupid was that?

At least Russia has a clear, understandable, and decidedly un-Hitleristic reason for his actions.

The history of Crimea shows an association with Russia since 1783. And a large portion of the population in Eastern Ukraine speaks Russian, not Ukrainian.

My friend finds the overthrow of the former president of Viktor Yanukovych quite acceptable (even though the US had a hand it), but somehow a vote by Crimea to rejoin Russia is invalid. What hypocrisy.

Now he supports the ridiculous notion of an "international system that produced peace".

Where?

Vietnam in the 60s? Iraq numerous times? Afghanistan? Egypt? Syria?

Just because there has been peace between Germany and France since WWII, let's not assume the cause is an "international system of peace".

No Price Too High

"Letting that system fail would be idiocy and we will not let it happen," says my friend.

Apparently no price is too high to pay to make sure Russia does not get away with annexation of Crimea, even though over 90% of Crimea voted that way. Rigged or not, it's safe to assume an overwhelming majority supported that view.

Sanctions, trade wars, shutoff of gas to Europe, no-fly zones over Russia, and punishment of Russian citizens who had nothing to do with this mess are all fair game to teach Russia a lesson, and make it comply.

The indiscriminate bombings by the Ukrainian army smack in civilian population centers are clearly fair game in the name of international peace. And let's ignore Ukrainians Ordered to War, Women Burn the Military Writs

"We will not let it happen!"

Such arrogance, coupled with idiotic comparisons to Hitler and the constant promotion of war from warmongers on both sides of the aisle (especially senator John McCain), could precipitate the next world war.

But don't worry, WWIII with Russia would be a "small price to pay" to maintain an "international system of peace".

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Ukraine Threatens to Block Gas to Europe; Bluff or Stupidity?

Posted: 08 Aug 2014 08:50 AM PDT

Sanction madness has gotten so silly now that Russia may not have the option to play the nuclear card of blocking gas to Europe. Ukraine might play that card first.

Please consider Ukraine May Block All Transit from Russia in Sanctions Row

Ukraine ready to impose sanctions against any transit via its territory, including air flights and gas supplies to Europe, Prime Minister Arseniy Yatsenyuk said Friday.

Kiev has also prepared a list of 172 Russian citizens and 65 companies predominantly Russian to put under sanctions for "sponsoring terrorism, supporting the annexation of Crimea, and violating the territorial integrity of Ukraine," Yatsenyuk said at a briefing on Friday.

Proposed sanctions include asset freezes, bans on certain enterprises, bans on privatizing state property, refusing to issue licenses, and a complete or partial ban on transit- both aviation and gas.

"We simply have no other choice," the Prime Minister said, adding that Ukraine will use part of the planned $17 billion IMF aid to achieve energy independence, and may go to the World Bank for help. The country, which is on the brink of economic default, received the first $3.2 billion tranche in May.

Ukraine wants to "put a stop" to its gas dependence on Russia, its main source for energy to heat homes and buildings, but understands it will not be an "easy" process, Yatsenyuk told reporters.

The Prime Minister estimates Ukraine could stand to lose $7 billion as a result of imposing sectorial sanctions against Russia, its biggest trading partner after the European Union.

If approved, a halt to Russian gas transit would hit Europe as the continent gets 15 percent of the energy it needs from Russia. In June Gazprom, Russia's national gas company announced it was stopping deliveries to Ukraine, but would continue to ship 180 billion cubic meters of gas to Europe.

The falling out with Russia's gas major over pricing and debt has forced Ukraine to cut back on its heavy use of energy. Until the winter, homes will go without hot water to cut gas consumption by 30 percent.

On top of that, Ukraine is also exploring reverse flow options; importing gas from neighboring European countries.

Gas Pipelines

Bluff or Stupidity?

My first thought was this is an obvious bluff. However, sanction madness is so ridiculous, Ukraine might do it as an act of one-up stupidity.

No Hot Water, Reverse Flow Madness

By mandate, Ukrainian homes are supposed to have no hot water until winter. Is Europe supposed to follow suit?

This reverse flow talk is laughable. Europe gets 30% of its gas from Russia, yet somehow Europe is supposed to send gas to Ukraine.

I would like an explanation from the mathematical wizards who think this may be possible. Moreover, even if the gas was available, pipeline changes need to be made. When are those supposed to occur?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com