There Is No Way To Fix Obama’s Economy Mary Kate Cary U.S. News & World Report January 15, 2014
Obama's talk of income inequality and his attempt to extend unemployment insurance won't fix the harm he's done to the economy President Obama recently declared that income inequality is "the defining challenge of our time," one that "drives everything I do in this office." In fact, he mentioned it 26 times in one speech (to the Center for American Progress, a liberal think tank, last month), telling the audience that it motivates his decisions on everything from formulating our federal budget to reforming our health care, housing and financial systems. You can bet income inequality will be the theme of his State of the Union address later this month, as well as most of his speeches for the next three years. Obama correctly points out that stagnant incomes for the middle class have hurt the ability of many Americans to move to better jobs. What he doesn't usually mention is that the combined trends of increased income inequality and decreasing economic mobility have worsened during the five years he's been in office. According to the Census Bureau, this is the first time since 1965 that the poverty rate has remained above 15 percent for three straight years; since 2009, median household income in America has fallen 4.4 percent to $58,000 per year; median household income for black Americans has dropped nearly 11 percent to just $33,519. After five years of "recovery" under the Obama administration, a shocking 46.5 million Americans still live in poverty. There is a reason more people live in poverty now than when President Obama took office, and that reason is the economic policies he is pursuing. The explosion of federal regulations, the lack of corporate tax reform, the uncertainty as to which federal laws will be enforced and which will not, and
the disastrous rollout of health care reform have all taken their toll on consumer and business confidence. The best way out of poverty is a job, and unemployment has remained stubbornly high since Obama took office. For the remainder of his term, Obama is calling for more regulation, more spending, more collective bargaining for unions and a higher minimum wage. He continues to defend his health reform plan in speeches. And he's announced "promise zones" to spur small business growth in the poorest neighborhoods. And, in a stunning admission of the failure of his administration's job creation policies, he has called for yet another extension of unemployment benefits, which are financed by payroll taxes on employers and employees. When states run out of money to pay the benefits, they borrow from the federal government. If the debt is not repaid, then the feds impose automatic state payroll tax hikes on employers and workers. Fifteen states still owe the feds nearly $20 billion, down from 34 states owing $30 billion. Higher payroll taxes are not good for job growth and hit the working poor the hardest. Earlier this month, the president urged Congress to vote for extending benefits because doing so "creates jobs and voting against it does not." He accused Republicans who oppose the idea of "abandoning our fellow Americans" and being "just plain cruel." House Speaker John Boehner responded by saying that the benefits need to be paid for by spending cuts and that they should include job creation measures as well. If the president really wanted the House to pass the extension, he would have included a way to pay for it; instead, he's using the issue to paint Republicans as hard-hearted, cheap and cruel, a caricature they don't need. Thanks to health care reform, the president has a credibility problem with voters. People want solutions, and they're not getting them from Obama. There's an opening here for Republicans to make a larger, positive argument, beyond insisting that benefits be offset by cuts. The Republican case should go something like this: We all agree that government assistance can be effective in keeping families afloat when people are between jobs. Times are still tough, and most Americans want government to offer a hand up, not a handout. Emergency benefits can do just that. Most people want a safety net for others because, as Obama recently put it, "there but for the grace of God go I." No Republican is debating whether government should give people in trouble a hand. What is being debated is the point at which those who get emergency benefits for a very long time eventually need to find other ways to support themselves. Putting reasonable limits on what is meant to be temporary help is not cruel, cheap or hard-hearted. Republicans need to move the conversation to the next level: Give Americans real specifics about how they want to rebuild our economy. And then Republicans need to deliver. If the GOP puts forth legislation to revive our manufacturing base, simplify the tax code, reasonably reform entitlements and rebuild our infrastructure, Democrats would have no choice but to support it. It's time for the GOP to become the party of less poverty, more economic mobility, more job creation and a financially stable safety net for those who need it. Time to be the party of hope and opportunity once again. Under Obama, the rich are getting richer and the poor are getting poorer. Let the left worry about how to make the rich poorer; the right should be focused on how to make the poor richer.
Sources Says China Grants Gold Import Licenses To Foreign Banks For First Time Reuters January 15, 2014
China has granted licenses to import gold to two foreign banks for the first time, sources said, as moves to open the world's biggest physical bullion market gather pace. Allowing more banks to import gold could increase the supply of the metal into the country, easing local prices that are higher than in most Asian nations. China's gold imports more than doubled last year to over 1,000 tonnes - ousting India as the biggest buyer - as demand soared to unprecedented levels due to the first drop in international prices in 13 years. ANZ (ANZ.AX) and HSBC (HSBA.L) were awarded import licenses late last year, two sources with direct knowledge of the matter told Reuters. Other trading sources said China Everbright Bank (601818.SS) has also received approval to join the nine local banks already allowed to ship gold into China. Beijing strictly controls how much the banks import through a quota system. ANZ and HSBC declined to comment. Everbright could not immediately be reached for comment. "China is actually increasing its transparency. I think there will possibly be further access to other banks as well," said Cameron Alexander, manager of Asian precious metals demand at metals
consultancy GFMS, which is owned by Thomson Reuters. China faced a supply crunch early in 2013 when a sharp plunge in gold prices released pent up demand that eroded inventories at banks and jewelry sellers. Premiums in China tend to be higher as supply is tighter than other parts of Asia due to the quota system and the limited number of import licenses. Premiums are currently about $15 an ounce over London prices, compared to less than $2 in Singapore and Hong Kong. They rose to a record high of $30 in April-May last year. China imported 1,060 tonnes of gold from Hong Kong in the first 11 months of 2013. Beijing does not release gold trade data, so numbers from Hong Kong - the main conduit for gold - provide the best estimate on imports. But traders warned the award of the new licenses did not necessarily mean imports would jump sharply from 2013's record volumes, as the level of demand would be the main factor driving shipments. But they added that the move indicated appetite for gold would likely be strong. ANZ and HSBC were in 2011 also the first two foreign banks to get the green light to trade gold futures on the Shanghai Futures Exchange. ANZ is the only foreign bank on the list of 10 most-active members by volume on the Shanghai Gold Exchange, the physical trading platform in China. STRING OF CHANGES The granting of new licenses is the latest in a string of steps by China to ease restrictions on bullion trading and boost market accessibility. China approved its first gold-backed exchange-traded funds last year and extended trading hours on the futures exchange. The central bank issued a draft policy document in September that proposed letting more banks import and export gold. The move also comes as the SGE plans to launch gold futures in the city's pilot free trade zone this year that would be open to foreign investors. "China will need to allow more foreign players into the physical gold market if it's planning to have foreign investors participate on its gold futures," said one of the sources. "This is the first step that the regulators are taking to ensure that its gold futures contract in the freetrade zone can take off." (This version of the story corrects the third paragraph to show gold prices fell for first time in 13 years, not 12) Marc Faber: We Are in a Gigantic Financial Asset Bubble VIDEO BELOW http://www.youtube.com/watch?v=viRkvg3jk80
Wells Fargo Denies Plan To Charge Customers For Domestic Deposits Paul Joseph Watson Infowars.com January 15, 2014
$5 dollar fee for every paycheck deposited in checking or savings account, claims Florida woman According to a Florida woman, Wells Fargo is telling its customers that they will have to pay a $5 dollar fee every time they deposit funds into their checking or savings account. The bank itself has subsequently said that no such policy has been instituted, although it will begin charging for U.S. dollar deposits sent from abroad. The woman sent us the bank statement above which she received on Monday informing her of changes to her Wells Fargo checking and savings account. It reads: “Effective April 7, 2014, the fee for deposited U.S. or foreign currency denominated international items, including drafts, will be $5.00 per item.” In other words, every time a customer deposits funds into their account, be it a paycheck or anything else, Wells Fargo imposes a de facto flat rate tax of $5 dollars. However, it remains unclear as to whether this relates to domestic deposits or deposits being sent from abroad in U.S. dollars. UPDATE: Wells Fargo now says that this new fee applies only to international deposits. The Florida woman says she was told directly by Wells Fargo that the new policy applied to domestic deposits. “I called their 800-869-3557 Texas call center to make sure I wasn’t seeing things and the customer service rep Adelina informed me that whenever I will make a deposit of my paycheck or anything I will be charged $5.00,” said the woman, adding that she closed her account because she is a single mother and cannot afford to pay the fee every time she deposits money. The policy sounds similar to a 2011 move by Bank of America to charge customers a $5 dollar fee for every debit card purchase, a proposal that was swiftly abandoned after a huge customer uproar.
As the language suggests, this is only related to international deposits for now, but fears have been rife for months that banks could start charging customers for keeping money in their account. Why is this important? Back in November, numerous mainstream news outlets reported on the rumor that banks were about to start charging fees for deposits, but that such a scenario was “highly unlikely,” and only possible if the Federal Reserve reduced its bank lending rate from 0.25%, which hasn’t happened. While JPMorgan Chase asserted they were not planning on charging customers for deposits, Citigroup, Bank of America, SunTrust and Wells Fargo declined to comment. Falling margins on what banks make on loans compared to what they pay out on deposits is the major factor behind banks being forced to charge customers for depositing their own money. Just three months ago, Wells Fargo John Stumpf defended the bank’s decision to continue raking in deposits from checking accounts and that he would not turn away customers. Financial analysts have asserted that banks charging customers for depositing money would signal a major shift in the state of the U.S. economy. According to Senior San Francisco Business Times reporter Mark Calvey, such a move would, “send shudders throughout the nation’s economy as it underscores that loan demand is so weak that banks can no longer make money on lending.” The Financial Times also recently noted that customers, “paying just to leave money in the bank would be highly unusual.” Should it come to pass, imposing what amounts to negative interest rates on customers would merely the latest example of banks resorting to onerous capital controls as the economy begins to meltdown. Back in November, we also exclusively reported on how Chase Bank was banning cash withdrawals over $50,000 total per statement cycle while preventing business customers from sending international wire transfers.
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