Daily Digest 2/28

• S&P Warns Student Loans May Be The Next Bubble To Burst In US Economy
• Spain barter economy wins followers in grip of recession
• 3 doomsaying experts who foresee economic devastation ahead
• The Existential Financial Problem Of Our Time
• Performance of Stocks, Bonds, and Gold In an Inflationary Environment
• The World Of Power: Magic Mountain
• I Was a Warehouse Wage Slave
• In Historic Vote, Vermont Poised to Shut Down Lone Nuclear Reactor
• Another Fukushima Casualty - Japan's Fast Breeder Reactor Program
• Japan Weighed Evacuating Tokyo in Nuclear Crisis

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Economy

S&P Warns Student Loans May Be The Next Bubble To Burst In US Economy (Jeff B.)

In 2011, Moody's Analytics issued a similar warning. In a report, Moody's concluded, "The long-run outlook for student lending and borrowers remains worrisome. Unlike other segments of the consumer-credit economy, student loans have not demonstrated much improvement in performance despite some improvement in the broader economy. ... [T]here is increasing concern that many students may be getting their loans for the wrong reasons, or that borrowers -- and lenders -- have unrealistic expectations of borrowers' future earnings."

Spain barter economy wins followers in grip of recession (fishingemma)

As a storeholder, Scena is an exception in a small but growing parallel economy that is being fuelled mainly by a clutch of websites, paid for by advertising and offering platforms for the cash-free exchange of everything from language classes and dog-walking to furniture and cars.

3 doomsaying experts who foresee economic devastation ahead (Phil H.)

Gerald Celente, a trend forecaster at the Trends Research Institute, says Americans should brace themselves for an "economic 9/11" due to policymakers' inability to solve the world's financial and economic woes. The coming meltdown, he predicts, will lead to growing social unrest and anti-government sentiment, a U.S. dollar with far less purchasing power and more people out of work.

The Existential Financial Problem Of Our Time (ewilkerson)

In debt markets we are seeing a catastrophic example of the law of diminishing returns. As Marson makes clear, it takes greater amounts of debt to have the same marginal impact on GDP. The marginal effectiveness of debt has collapsed during the period since the end of the Second World War.

For the USA, for example, 1 unit of debt generated 0.63 units of GDP between 1953 and 1984; that same 1 unit of debt generated 0.24 units of GDP between 1985 and 2000; since 2000, 1 unit of debt has generated just 0.08 units of GDP.

Performance of Stocks, Bonds, and Gold In an Inflationary Environment (June C.)

Years of underinvestment in mining has created a dangerous shortage of gold and silver relative to potential demand. Various financial instruments have been introduced to provide 'paper gold and silver' to meet that demand. In addition, even physical exchanges like the LBMA have been pushed to dangerously high rates of leverage as demand for bullion outstrips available supply. And so the markets drift inexorably into great opaqueness and repeated frauds because the world of paper has unhinged itself from reality across multiple fronts. The problem is that the state of the currency feeds into all finanical markets and so a mischief done there spawns its children everywhere.

The World Of Power: Magic Mountain (jdargis)

Many Davos participants rarely, if ever, attend even one. Instead, they float around in the slack spaces, sitting down to one arranged meeting after another, or else making themselves available for chance encounters, either with friends or with strangers whom they will ever after be able to refer to as friends. The Congress Center, the daytime hub, is a warren of interconnected lounges, cafés, lobbies, and lecture halls, with espresso bars, juice stations, and stacks of apples scattered about. The participants have their preferred hovering areas. Wandering the center in search of people to talk to was like fishing a stretch of river; one could observe, over time, which pools held which fish, and what times of day they liked to feed. Jamie Dimon, running shoes in hand, near the espresso stand by the Global Leadership Fellows Program, in the late afternoon.

I Was a Warehouse Wage Slave (jdargis)

"We will be fired if we say we just can't or won't get better, the workamper tells me. But so long as I resign myself to hearing how inadequate I am on a regular basis, I can keep this job. 'Do you think this job has to be this terrible?' I ask the workamper.

"'Oh, no,' she says, and makes a face at me like I've asked a stupid question, which I have. As if Amalgamated couldn't bear to lose a fraction of a percent of profits by employing a few more than the absolute minimum of bodies they have to, or by storing the merchandise at halfway ergonomic heights and angles. But that would cost space, and space costs money, and money is not a thing customers could possibly be expected to hand over for this service without huffily taking their business elsewhere."

Energy

In Historic Vote, Vermont Poised to Shut Down Lone Nuclear Reactor (guardia)

Arnie Gundersen interviewed by Democracy Now about the pending vote to shut down Vermont Yankee.

Another Fukushima Casualty - Japan's Fast Breeder Reactor Program (James S.)

The review is effectively a death sentence for Japan’s Monju troubled $12 billion experimental fast-breeder reactor in Tsuruga, Fukui Prefecture, intended to reprocess spent nuclear reactor fuel to produce plutonium that can subsequently be recycled and reused to generate electricity. Japan had high hopes that the fast-breeder reactor program could close the loop on its nuclear fuel cycle, allowing it to reuse, recycle and produce fresh fuel for its 54 reactors. The subcommittee’s report effectively ends Japan’s hopes of using nuclear fuel on a near-endless cycle.

Japan Weighed Evacuating Tokyo in Nuclear Crisis (jdargis)

The team interviewed more than 300 people, including top nuclear regulators and government officials, as well as the prime minister during the crisis, Naoto Kan. They were granted extraordinary access, in part because of a strong public demand for greater accountability and because the organization’s founder, Yoichi Funabashi, a former editor in chief of the daily newspaper Asahi Shimbun, is one of Japan’s most respected public intellectuals.

Article suggestions for the Daily Digest can be sent to dd@chrismartenson.com. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."