|Bank of England; Source: The Telegraph|
Yesterday, the Bank of England announced a cut in interest rates to record lows and a new 70 billion pound batch of quantitative easing (money printing) in an effort to prevent the UK economy from declining further. It comes shortly after central bank of Australia also decided to cut interest rates earlier this week in an effort to stimulate their economy.These are more signs that the global economic system is under severe stress, and central banks are growing increasingly desperate.
Unfortunately, the standard remedy, as applied by the Bank of England, only postpones the inevitable collapse a bit longer. By injecting new money into the economy, directly and indirectly, it can keep stock prices inflated and possibly encourage consumer spending to temporarily prop up GDP. However, it cannot make the underlying companies more profitable, nor make the average customers more financially secure in the long-run. Indeed, it actually makes the underlying problems worse.
Which brings us to…
MetLife, a major financial institution and insurance company based in New York City, reported a massive drop in earnings yesterday. They saw a 48% drop compared to last year, to be exact. Ironically, the primary reason cited for the decline in earnings was–wait for it–low interest rates.
This comes after Deutsche Bank, the second largest bank in the EU, reported even more devastating results this quarter facing many of the same problems. Their earnings declined 98% relative to last year at this time.
In other words, the central banks and governments of the world, in the name of trying to stimulate and stabilize the economy, are wreaking utter havoc on the actual banks (and pensions) in the economy.
Which has us wondering just how stable the economy will be when major banks become bankrupt as a result. I’m sure it will be fine.
DC Transit terror plot involved a $245 donation and… nothing else
Earlier this week, Americans learned that the FBI had captured a terrorism suspect who was a member of the DC Transit Police. Given the nature of the suspect’s position, the story garnered national attention.
The suspect was accused of aiding ISIS in initial reports. The question remained, however, what did the DC terrorist suspect do?
Now we know.
His crime was allegedly sending $245 in telecommunications gift cards to a friend who supposedly lived in ISIS territory. In fact, his “friend” was an informant collaborating with the FBI, not with ISIS.
So as far as we know, the DC transit terrorism suspect planned no violence and had no interaction with ISIS. And now he faces up to 20 years in prison for his crimes.
Who else is psyched that Libertarian Vice Presidential Candidate Bill Weld wants to have 1,000 more FBI agents on the job to pursue serious homegrown terror threats like these? Not this guy.
Read our full write-up for more on this, or check out this piece from The Intercept.
Intervention Begets Intervention: Libya Edition
With the US apparently embarking on an open-ended bombing campaign in Libya, it is more important than ever to be skeptical about claims of success. A new article in The Guardian makes the case quite well. In it, Trevor Timm explains how each intervention paves the way for the next, describing what he calls the “War on Terror Circle of Life”:
It’s yet another episode of the War on Terror Circle of Life, where the US bombs a country and then funnels weapons into the region, which leads to chaos and the opportunity for terrorist organizations, which then leads more US bombing.
A smart and timely piece that’s worth a read if you have the time. It’s available here.