Economy

Trump’s Tough Talk on Nafta Suggests Pact’s Demise Is Imminent

WASHINGTON — The North American Free Trade Agreement, long disparaged by President Trump as bad for the United States, was edging closer toward collapse as negotiators gathered for a fourth round of contentious talks here this week.

In recent weeks, the Trump administration has sparred with American businesses that support Nafta and has pushed for significant changes that negotiators from Mexico and Canada say are nonstarters. All the while, the president has continued threatening to withdraw the United States from the trade agreement, which he has maligned as the worst in history.

As the trade talks began on Wednesday, Mr. Trump, seated in the Oval Office beside Prime Minister Justin Trudeau of Canada, said it was “possible” that the United States would drop out of Nafta.

“It’s possible we won’t be able to make a deal, and it’s possible that we will,” the president said. “We’ll see if we can do the kind of changes that we need. We have to protect our workers. And in all fairness, the prime minister wants to protect Canada and his people also. So we’ll see what happens with Nafta, but I’ve been opposed to Nafta for a long time, in terms of the fairness of Nafta.”

Mr. Trudeau, in comments later at the Canadian Embassy, said he remains optimistic about the potential for a Nafta deal but noted that Canadians must be “ready for anything.”

The collapse of the 1994 trade deal would reverberate throughout the global economy, inflicting damage far beyond Mexico, Canada and the United States and affecting industries as varied as manufacturing, agriculture and energy. It would also sow at least short-term chaos for businesses like the auto industry that have arranged their North American supply chains around the deal’s terms.

The ripple effects could also impede other aspects of the president’s agenda, for example, by solidifying political opposition among farm state Republicans who support the pact and jeopardizing legislative priorities like tax reform. And it could have far-reaching political effects, including the Mexican general election in July 2018 and Mr. Trump’s own re-election campaign.

Prime Minister Justin Trudeau of Canada met Wednesday with members of the House Ways and Means Committee about the Nafta negotiations on Capitol Hill in Washington.CreditSaul Loeb/Agence France-Presse — Getty Images

Business leaders have become spooked by the increasing odds of the trade deal’s demise, and on Monday, more than 310 state and local chambers of commerce sent a letter to the administration urging the United States to remain in Nafta. Speaking in Mexico on Tuesday, the president of the U.S. Chamber of Commerce, Thomas J. Donohue, said the negotiations had “reached a critical moment. And the chamber has had no choice but ring the alarm bells.”

“Let me be forceful and direct,” he said. “There are several poison pill proposals still on the table that could doom the entire deal.”

The potential demise of the trade deal prompted supportive messages from labor unions, including the A.F.L.-C.I.O. and the United Steelworkers, as well as some Democrats.

“Any trade proposal that makes multinational corporations nervous is a good sign that it’s moving in the right direction for workers,” said Senator Sherrod Brown, Democrat of Ohio.

If the deal does fall apart, the United States, Canada and Mexico would revert to average tariffs that are relatively low — just a few percent in most cases. But several agricultural products would face much higher duties. American farmers would see a 25 percent tariff on shipments of beef, 45 percent on turkey and some dairy products, and 75 percent on chicken, potatoes and high fructose corn syrup sent to Mexico.

For months, some of the most powerful business leaders in the country, and the lobbies and political figures that represent them, had hoped that the president’s strong wording was more a negotiating tactic than a real threat and that he would ultimately go along with their agenda of modernization. Nafta is nearly a quarter-century old, and people across the political spectrum say it should be updated for the 21st century while preserving the open trading system that has linked the North American economy.

The pact has allowed industries to reorganize their supply chains around the continent to take advantage of the three countries’ differing resources and strengths, lifting the continent’s economies and more than tripling America’s trade with Canada and Mexico since its inception. Economists contend that many workers have benefited from these changes in the form of higher wages and employment, but many workers have lost their jobs as manufacturing plants relocated to Mexico or Canada, making Nafta a target of labor unions, many Democrats and a few industries.

But most business leaders had hoped that the president, whose Nafta criticism has been unrelenting, would be content to oversee tweaks to modernize the agreement, and then call it a political transformation.

It sometimes looked as if that might be the case. The appointment of Robert Lighthizer as United States trade representative, who pledged in his confirmation hearing to “do no harm” to Nafta, reassured many on Capitol Hill, where Mr. Lighthizer had long served in aide roles. And when the administration released its negotiating goals in July for the deal, they echoed many priorities of previous administrations.

But now, eight weeks into trade talks that were originally supposed to conclude by year’s end, the administration continues to push for concessions that the business community warns would essentially undermine the pact, and which few observers believe Canada and Mexico could agree to politically.

“Everyone knows that much of what is being proposed in key areas are, in effect, non-starters, which begs the question as to what, exactly, the administration is trying to achieve,” Michael Camuñez, a former assistant secretary of commerce under President Barack Obama, wrote in an email. It’s not unreasonable to think that by accommodating the president’s most extreme positions, American negotiators are “simply giving Trump cover to do what he really wants: withdraw from the agreement,” he said.

Phil Levy, a trade adviser for the George W. Bush administration, said the president was most likely looking for a pretext to kill Nafta.

“Find me the last trade agreement that U.S. passed with the chamber in opposition,” Mr. Levy said. “You don’t have a chance. It’s hard enough with the U.S. Chamber in favor.”

The most controversial of the administration’s proposals, floated by Commerce Secretary Wilbur Ross, would incorporate a sunset clause in the deal, causing Nafta to automatically expire unless all three countries voted periodically to continue it. That provision has drawn swift condemnation from the chamber and other industry groups like the National Association of Manufacturers, which say that it would instill so much uncertainty in the future of Nafta that it would basically nullify the trade agreement.

Another contentious push by the United States centers on changing Nafta’s rules governing how much of a product needs to be made in North America in order to enjoy tariff-free trade between the countries. The United States is pushing for higher levels, including a requirement to make 85 percent of the value of automobiles and auto parts in North America, up from 62.5 percent currently, and an additional requirement for 50 percent of the value to come from the United States.

That has pitted some of the world’s biggest auto companies against the Trump administration. Industry representatives say such high and complex barriers could deter companies from manufacturing in the United States altogether.

Employees at work in a new Honda plant in Mexico. CreditEduardo Verdugo/Associated Press

The administration has also proposed limits on the number of federal government contracts that Mexican and Canadian companies can win, as well as significant changes to how disputes are resolved under Nafta.

Business groups say they are firmly opposed to an American push to curtail a provision called investor-state dispute settlement, which allows companies to sue Canada, Mexico and the United States for unfair treatment under Nafta. Meanwhile, Canada has said that it will not consider dispensing with another provision, Nafta’s Chapter 19, which allows countries to challenge each other’s anti-dumping and countervailing duty decisions before an independent panel.

In his remarks Tuesday, Mr. Donohue called the administration’s proposed changes to these provisions “unnecessary and unacceptable.”

Mr. Donohue’s remarks followed a sharp exchange of words between the Chamber of Commerce, the country’s most powerful business lobby, and the Trump administration on Friday.

John Murphy, senior vice president of international policy for the chamber, said the administration’s proposals had “no identifiable constituency backing them” and had sparked “a remarkable degree of unity in their rejection.” He added that business leaders had perhaps never been at odds with an administration over a trade negotiation on so many fronts.

Hours later, the administration fired back.

“The president has been clear that Nafta has been a disaster for many Americans, and achieving his objectives requires substantial change,” said Emily Davis, a spokeswoman for the trade representative. “These changes of course will be opposed by entrenched Washington lobbyists and trade associations. We have always understood that draining the swamp would be controversial in Washington.”

Mr. Trump is known for taking a tough negotiating stance, and analysts said the administration might view its ambitious opening requests as a way to gain more leverage in the Nafta negotiations.

But Mr. Murphy and others in the business community cautioned that such an approach would probably be ill-fated. In both Canada and Mexico, Mr. Trump is unpopular, and caving to his demands could have devastating consequences for local politicians. Mexican government officials have repeatedly said they would not negotiate with a gun to the head.

“There’s an old adage in negotiations, never take a hostage you wouldn’t shoot,” Mr. Murphy said.

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Israel’s trade with Russia leaps by 25%

Trade between Israel and Russia has grown this year by 25 percent, officials from both countries revealed, amid complications with other Russian trading partners.

The first six months of 2017 saw increased trade between the nations of about $380 million over the corresponding period last year.

Ze’ev Elkin, the cabinet minister responsible for environmental protection and issues connected with Jerusalem, announced the figures earlier this week at a conference in Moscow about Russian-Israeli relations.

“There is still great potential for increase in trade and there is much work ahead of us,” Elkin said in reference to ongoing talks since 2013 on signing a free trade agreement with Russia.

Temur Ben Yehuda, chairman of the Israeli Russian Business Council that co-sponsored the Moscow conference, cited primarily the attractiveness of Israeli businesses to Russian counterparts and vice versa in explaining the increase in trade between Russia and Israel.

“We are not only conducting dialogue on increasing trade, we are also signing major agreements between Israel and Russian firms, including Watergen, Assuta and many others,” he said.

The increase comes amid tightening cooperation between Israel and Russia on security issues connected with Syria, where the Russian government is engaged in propping up the beleaguered regime of the country’s president, Bashar Assad. Its involvement in Syria has complicated Russia’s relations with Turkey, which has aided some forces fighting Assad in Syria’s civil war dating to 2011, and soured trade between those nations.

Separately, Russia’s trade with the European Union and the United States has also suffered due to sanctions imposed by the West over its invasion of Ukraine in 2014 and annexation of land.

During that period, Russia’s relations with Israel, which have remained neutral both on the Syrian issue and Ukraine, have noticeably improved, with Prime Minister Benjamin Netanyahu traveling to Moscow at least five times in the space of one year.

The strengthening of the ruble, which had lost half its value against the dollar due to dropping oil prices, has also helped Russia’s ability to conduct international trade.

Young Men Protest Enslavement by Jewish Federal Reserve

How to make money from the NFL’s ratings debacle as anthem protests grow

NFL ratings are struggling right now, as President Donald Trump continues to stoke the flames of a red-hot debate over national anthem protests, while the actual on-field product has also left something to be desired.

But fear not, football fans — JPMorgan knows how you can make a pretty penny off the league’s woes.

It involves making a short-term bet that shares of CBS will drop. The most-watched US television network and home to multiple games a week, CBS serves as a bellwether of sorts for NFL viewership.

JPMorgan specifically recommends purchasing weekly put contracts that will start making money if CBS shares decline roughly 1% to $57.50 by expiration on October 6.

While it’s still too early to know if Trump’s inflammatory comments and the defiant league-wide response will have a material impact on ratings, this week’s upcoming slate of games could provide a much better idea. As such, JPMorgan figures it can’t hurt to be prepared in the event of a major downswing.

“Any potential NFL boycott is more likely to be determined in this weekend’s results,” Shawn Quigg, an equity derivatives strategist at JPMorgan, wrote in a client note. “Investors likely could cite the anthem debate for any weak viewership results, adding to existing viewership concerns. Thus, the greater reward-risk appears skewed to the downside in the near-term as weaker results may mobilize investors to take the potential impact more seriously.”

For an example of how quickly NFL dynamics have shifted since protests have gotten more widespread, JPMorgan cites the spike in jersey sales for Pittsburgh Steeler offensive lineman Alejandro Villanueva. He was the only Steeler on the field for the national anthem this past Sunday, and the firm says that may suggest fans favor it when players stand for the anthem.

While that’s certainly a lot to extrapolate from one instance, making JPMorgan’s suggested options wager could pay off even if ratings decline for other reasons. After all, even before the number of protests grew this past week, there were already worries that declining viewershipcould hamper future profitability for NFL TV partners.

CBS shares rose 0.6% to $58.35 at 2:29 pm EST.

De-Dollarization Spells US Runaway Inflation

http://www.renegadetribune.com/de-dollarization-spells-us-runaway-inflation/
By Russ Winter

The primary causa proxima for runaway inflation in America would be the repatriation of U.S. dollars from abroad. In particular, this would involve the discontinuance of petrodollars as a reserve currency. This would also involve direct goods trade as well. Russia, China and other dollar-bond holders in truth financed the U.S. wars that were aimed at them by buying U.S. debt. When the foreign reserve status of the U.S. dollar erodes, those dollars flow back into the domestic United States and incinerate price stability, causing substantial bursts of inflation.

Therefore, the following question needs to be asked: What indications are there that the world, or at least a large part of the world, is turning its back on the U.S. dollar?

The arrival of Trump’s wild men and the overuse and abuse of sanctions and aggressive warfare has spurred critical steps and reactions.

Just last week and as relations between the U.S. and Russia continue melt, Putin ordered an end to trade in U.S. dollars at Russian seaports.

China, Russia and India have cut deals in which they’ve agreed to accept each others’ currencies for bi-lateral trade.

At the Sept. 5 annual BRICS Summit in Xiamen, China, Russian President Putin made a simple and very clear statement of the Russian view of the present economic world. He stated:

Russia shares the BRICS countries’ concerns over the unfairness of the global financial and economic architecture, which does not give due regard to the growing weight of the emerging economies. We are ready to work together with our partners to promote international financial regulation reforms and to overcome the excessive domination of the limited number of reserve currencies.”

The Shanghai Cooperation Organization (SCO) is completing the working architecture of a new monetary alternative to a dollar world. In addition to founding members China and Russia, the SCO full members include Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and, most recently, India and Pakistan. This is a population of well over 3 billion people, some 42% of the entire world population, coming together in a coherent, planned de-dollarization

China is the world’s largest oil importer. That country is now preparing to launch a crude oil futures contract denominated in Chinese yuan and convertible into goldpotentially creating the most important Asian oil benchmark and allowing oil exporters to bypass U.S.-dollar denominated benchmarks by trading in yuan.

Trump on his end on Sept. 3 threatened to “cut off trade with China, if that country maintained trade with North Korea.” Just this threat alone should engender a flood of dollars back into the U.S. Note that Russia and China’s response immediately following this threat was, in essence, “bastante.”

Iran and South Korea just signed banking cooperation to bypass the dollar.

Switching to another petrodollar trade partner, Venezuela is going to implement a new system of international payments and will create a basket of currencies to free them from the dollar, Maduro said. He hinted further that the South American country would look to using the yuan instead, among other currencies.

 If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro,” Maduro also said.

A clear signal that something deadly serious is afoot would be the abolition of the Saudi riyal’s peg to the U.S. dollar.

The Federal Reserve Cry-Wolf Hacks Are a Sight to Behold

Meanwhile, back on the Yellen “Cry Wolf” farm, the Fed heads are all over the map about inflation. Clearly there is no discussion about excess dollar repatriation at all. If this came on their radar screen soon enough, they would have to act decisively to drain dollars from the U.S. domestic economy.

What appears to be unfolding is an attempt to sound credible and tough without doing much. To that end, hawk Dudley stated, “Inflation’s coming soon.”

Then Janet “Cry Wolf” Yellen openly admitted that the Fed does not “fully understand” inflation. Just yesterday she admitted that the Fed was “wrong” about employment and inflation, stating, “The FOMC’s understanding of the forces driving inflation is imperfect.” Trying to sound credible, she then suggested, “The Fed “should also be wary of moving too gradually (on monetary policy).”

And now the Cleveland Fed’s Median CPI measure has broken above 3.0%. Yellen chimes in, “It would be imprudent to keep monetary policy on hold until inflation is back to 2 percent.” I have no idea what planet she is even talking about?

QE unwind begins October 1. The vote was unanimous. Even cannot-spot-bubbles Neel Kashkari voted for it.

Here’s the schedule:

  • Oct – Dec 2017: $10 billion a month.
  • Jan – Mar 2018: $20 billion a month.
  • Apr – Jun 2018: $30 billion a month.
  • Jul – Sep 2018: $40 billion a month.
  • From Oct 2018 forward $50 billion a month.

So $300 billion over the next 12 months- then $600 billion the year following.

As of this morning the “market” is pricing the odds at 78% for a measly interest rate increase way out on Dec. 13. Meanwhile, it is uncertain who Trump will pick to replace Yellen in January. A lot can happen on the de-dollarization front between now and then.

The Fed has let the inflation genie out of the bottle even before the impact of de-dollarization. Yellen and her cohorts are now frantically trying to invent excuses for when inflation rips through the financial system.

 

Target to raise its minimum hourly wage to $15 by the end of 2020

Target Corp. said Monday that it is raising the minimum wage for its workers to $11 an hour starting next month and then to $15 by the end of 2020.

The company said the move will help it better recruit and retain top-quality staff and provide a better shopping experience for its customers.

The initiative is part of the retailer’s overall strategy, announced this year, to reinvent its business, including remodeling stores, expanding its online services and opening up smaller urban locations.

Target quietly raised entry-level hourly wages to $10 last year, from $9 the previous year, following initiatives by Wal-Mart and others to boost wages in a fiercely competitive marketplace. But Target’s hike to $15 an hour far exceeds not only the federal minimum of $7.25 an hour but the hourly base pay at Wal-Mart, the nation’s largest private employer, and plenty of its other retail peers whose minimum hourly pay now hovers around $10.

As part of its $2.7-billion investment in workers, Wal-Mart Stores Inc. had raised its entry-level hourly pay for workers to $9 in 2015 and then to $10 in 2016. With Target’s outsized influence in the retailing world, its increase could force rivals to match the pay in order to compete.

“We see this not only as an investment in our team but an investment in an elevated experience for our guests and the communities we serve,” Brian Cornell, Target’s chief executive, told reporters during a conference call Friday.

Target’s planned minimum-wage increases outpace those mandated by California: Statewide, the minimum wage at medium and large employers is $10.50 an hour, and it’s not scheduled to reach $15 until 2022. Los Angeles, however, already has a minimum wage of $12 an hour at those employers, and the city requires a boost to $15 by mid-2020.

The changes come at a time when there’s growing concern for hourly workers. Thousands of workers have staged protests to call attention to their financial struggles and to fight for hourly pay of $15. The November election of a Republican-controlled Congress dampened hopes of an increase in the $7.25-an-hour federal minimum wage. But advocates have continued to press for boosts on the state and local level.

At the same time, competition for lower-skilled workers has heated up, and retailers, likely hobbled by the threat of e-commerce, are falling behind. As shoppers get more mobile-savvy, retailers are seeking sales staff who are more skilled at customer service and in technology, such as using iPads to check out inventory. But with the unemployment rate near a 16-year low, the most desirable retail workers feel more confident in hopping from job to job.

Thirty-two percent of all first jobs in the U.S. are in retail, according to the National Retail Federation, the nation’s largest retail group, and stores overall have more job openings now than they did a few years ago.

Hourly pay at restaurants and hotels is up 3.5% from a year earlier, a much better raise than the 2.5% gain for all employees. For workers at transportation and warehousing companies, where e-commerce growth is fueling hiring, pay is up 2.7% in the last year. Retailers, however, have lifted pay just 1.8% in the last year. That may be spurring more workers to leave for better opportunities: Separate government data show the number of retail workers quitting their jobs this year and last is at the highest in a decade.

The average hourly pay for cashiers is now $10.14, according to the Hay Group’s survey of 140 retailers with annual sales of at least $500 million. The survey was conducted in May. A year ago, the hourly pay was $9.79.

Target said its minimum hourly wage of $11 is higher than the minimum wage in 48 states and matches the minimum wage in Massachusetts and Washington. It said the pay increase will affect thousands of its more than 300,000 workers, but it declined to quantify the percentage of its workforce. It said the increase to $11 an hour will apply to the more than 100,000 hourly workers that Target will be hiring for the holiday season.

Target declined to say what the average pay will be for its hourly workers with the increased wages.

The Minneapolis company reiterated its third-quarter and full-year profit guidance but said that it would update investors early next year about how the wage investments will affect long-term profits.

Target’s wage increases come as the discounter is seeing signs that its turnaround efforts are starting to win back shoppers.

In August, Target reported that a key sales figure rose in the second quarter, its revenue beat Wall Street expectations and its online sales jumped 32%. The increase for the key sales measure reversed four straight quarters of declines. At that time, the company also boosted its earnings expectations for the year. Target is spending $7 billion over three years to remodel old stores, open small ones in cities and college towns and offer faster delivery for online orders. It is also adding more clothing and furniture brands, and said that its children’s line, Cat & Jack, brought in $2 billion in sales since its launch a year ago.

Cornell said Target has been moving toward dedicated workers in specific areas such as beauty and clothing, and that the wage increases will only help improve customer experience.

Wal-Mart has been benefiting from its investment in its workers. The Bentonville, Ark., retailer has seen lower turnover among workers and has gotten much better scores by customers for its service. Wal-Mart’s namesake U.S. division reported a 1.8% increase in revenue at stores open at least a year during its fiscal second quarter, marking the 12th straight period of gains. Wal-Mart’s wage investments, however, did take a big bite out of profits.

Financialization And The Destruction Of The Real Economy

http://www.renegadetribune.com/financialization-destruction-real-economy/
By Charles Hugh Smith

Financialization is destroying the real economy, but few in power seem to notice or care. The reason why is painfully obvious: those in power are reaping vast fortunes from the engines of financialization–for example, former President Obama: Obama Goes From White House to Wall Street in Less Than One Year.

This is not to single out President Obama as a special case; politicos across the spectrum depend on the engines of financialization to fund their campaigns and make them multi-millionaires, and corporate managers and financiers have skimmed billions of dollars in gains not from producing new, better and more affordable goods and services but by playing financialization games such as borrowing billions to buy back stocks, leveraged buyouts, and so on–all of which have reaped the insiders gargantuan fortunes while hollowing out the real economy.

Financialization necessarily hollows out the real economy, as Gordon Long and I detail in this new video program: The Results of Financialization – Part I (34 minutes)

The key dynamic is that financialization creates irresistible incentives to ramp up debt and leverage at the expense of the real economy. Those who fail to exploit financialization will underperform the market and be fired.

As Gordon explains, if a CEO refuses to load a company up with debt, a private-equity financier with access to cheap Federal Reserve credit will scoop up the company in a private buyout, fire the management, extract immense profits by loading the company with debt, then take the hollowed-out shell public again, reaping another windfall of financialized gains.

Note that the private-equity financiers have every incentive to lay off employees, especially experienced workers who earn higher salaries, to reduce costs before they take the hollowed-out shell public.

How can corporations pay out more to shareholders than they actually earned? Easy–financialization.

Another key dynamic in financialization is limitless liquidity and super low interest rates set by central banks–rates that are so low and liquidity so abundant that corporations can roll over their debt and actually add more debt and keep their interest payments unchanged.

This dynamic inevitably leads to zombie corporations–corporations with low rates of growth and profitability and high debt loads that in an unfinancialized economy would be recognized as insolvent and liquidated.

As we explain, financialization skews the risk-reward in favor of financial games, so real-world investments no longer make sense. Why risk building a factory in the U.S. or training workers when the pay-off is uncertain, when there are so many ways to reap immense fortunes via financial games that are ultimately backstopped by the Federal Reserve or federal agencies (i.e. the taxpayers)?

As many observers have noted, these perverse incentives have siphoned human talent away from productive employment and into enormously well-compensated but parasitic, exploitative financialization-related jobs.

Strip an economy of capital, productive incentives, talent and yes, ethics, and what are we left with? An economy spiraling toward an inevitable collapse. The metaphor I’ve used to explain this in the past is the Yellowstone forest fire. The deadwood of bad debt, extreme leverage, zombie companies and all the other fallen branches of financialization pile up, but the central banks no longer allow any creative destruction of unpayable debt and mis-allocated capital; every brush fire is instantly suppressed with more stimulus, more liquidity and lower interest rates.

As a result, the deadwood sapping the real economy of productivity and innovation is allowed to pile higher.

The only possible output of this suppression is an economy piled high with explosive risk. Eventually Nature supplies a lightning strike, and the resulting conflagration consumes the entire economy.

I explain all this in greater detail in my short book Why Our Status Quo Failed and Is Beyond Reform.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Check out both of my new books, Inequality and the Collapse of Privilege($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform($3.95 Kindle, $8.95 print, $5.95 audiobook) For more, please visit the OTM essentials website.

Oil-rich Venezuela is abandoning the US petrodollar, plans to introduce new international payment system

“I am announcing that Venezuela intends to introduce a new international payment system and to create a currency basket for the liberation from the dollar and, [we intend] to free ourselves from the clutches of the dollar, the currency that is strangling our country.”

“If they pursue us with the dollar, we’ll use the Russian rouble, the yuan, yen, the Indian rupee, the euro,” Maduro said.

Maduro plans to use the weakest of two official foreign exchange regimes and a basket of currencies. Currently in Venezuela, one dollar buys 3,345 bolivars, according to the central bank. At the strongest official rate, one dollar buys just 10 bolivars, but on the black market the dollar fetches 20,193 bolivars. A thousand dollars of local currency bought when Maduro came to power in 2013 would now only be worth $1.20.

On August 25, US President Donald Trump signed an executive order imposing financial sanctions on the Venezuelan government. The White House said the measures were “carefully calibrated” to put financial pressure on Maduro’s government.

Its important to note that Venezuela sits on the largest amount of oil reserves in the world:

Reserves amounts are listed in millions of barrels (MMbbl):

READ MORE: Trump isn’t going to Invade Venezuela, but what he’s planning might be just as bad

The United States previously threatened to sanction anyone involved with the Constituent Assembly, which was elected on July 30.

The Constituent Assembly is a legislative body, which has the power to amend Venezuela’s constitution. The election of the assembly took place amid mass, deadly protests across the country. Venezuelan opposition, as well as the European Union and the United States, have refused to recognize the body’s legitimacy.

Maduro says this is part of an “economic war” waged by the opposition and Washington, aimed at his ouster.

“This is the fight against the economic blockade of the imperial sanctions of (U.S. President Donald) Trump,” said Maduro.

Will Venezuela and Nicolas Maduro share the same fate as Iraq and Saddam Hussein?

FEDERAL RESERVE SETS THE STAGE FOR GLOBAL ECONOMIC DISASTER (VIDEO)

http://www.thedailysheeple.com/federal-reserve-sets-the-stage-for-global-economic-disaster-video_092017

 

Easy money, the cure to the ‘Great Recession”, is now clogging the system and preventing a lot of small business owners and entrepreneurs from finding success. The size and scope of these assets bubbles haven’t been seen since the Great Depression and now the Fed will start tightening the money supply…This ain’t gonna end well, folks.

Watch on YouTube

Source: The Federal Reserve Is Setting America up for Economic Disaster

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Toys R Us files for bankruptcy

Toys R Us, facing imminent deadlines to pay off hundreds of millions in debt, said Monday that it has filed for Chapter 11 bankruptcy protection.

The move comes on the cusp of the all-important holiday season, a period in which many retailers earn nearly half of their annual revenue, and a time of year that is particularly lucrative for the giant toy seller.

The filing also strikes at the heart of one of the nation’s most iconic retailers, a household name for more than a generation. Toys R Us pioneered big-box toy retailing generations ago, a national chain that displaced many smaller, neighborhood toy stores.

The company emphasized that its roughly 1,600 locations will remain open and it will continue to work with suppliers to make sure its shelves remain well-stocked with games, gadgets, and other toys.

The company made the filing in the U.S. Bankruptcy Court for the Eastern District in Richmond, Va. Its Canadian subsidiary plans to make a similar petition in Ontario Superior Court.

“Today marks the dawn of a new era at Toys“R”Us where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way,” Dave Brandon, the company’s CEO said in a statement.

Noting that the restructuring will enable it to deal more effectively with its $5 billion in long-term debt, Brandon added that the bankruptcy filing “will provide us with greater financial flexibility to invest in our business, continue to improve the customer experience in our physical stores and online, and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide.”

The toy giant had been working with attorneys at the firm Kirkland and Ellis to explore options to deal most immediately with $400 million in debt due by the end of this year.

The bankruptcy filing may make some shoppers reluctant to make Toys R Us a destination during the upcoming holidays, and there may be gaps on some shelves if skittish suppliers decide to hold back on some deliveries. But bankruptcy could also give the toy store chain some relief, enabling it to cancel leases and abandon poorly performing locations.

More: Toys R Us may file for bankruptcy before the holidays: Report

Related: Toys R Us finally gets serious about e-commerce

Toys R Us: Once ahead of the retail game, now playing catch-up

Toys R Us becomes just the latest retailer to seek bankruptcy protection at a time when traditional stores are struggling to draw foot traffic and compete with the rise of Amazon and other online sellers. Aerosoles, Payless ShoeSource, Wet Seal, and Gymboree are among the dozens of others traditional brick and mortar chains who have also filed.

Toys R Us has acknowledged that its digital experience was lagging some of its peers, and it revamped its website this past summer.

As online shopping gains more popularity, retail stores like Macy’s and Sears are closing hundreds of storefronts and focusing on their presence on the internet. USA TODAY NETWORK

Toys R Us has carried a heavy debt load since it became a private company in 2005. Its private equity investors, KKR, Bain Capital, and Vornado Realty Trust, initially planned to earn back their investment with a public stock offering, but that plan fell apart three years later when the Great Recession hit.

Brandon came on board as chief executive in 2015 to steer a turnaround that aimed to prepare the company for either another attempt to go public or a sale. The company, which acknowledged lagging behind its peers when it come to its digital experience, also revamped its website this summer. But success has been elusive.  Toys R Us now trails Walmart, the biggest toy seller in the U.S. And shoppers have a range of online options when browsing for gadgets and games.

The toy store chain’s long-term debt was $5 billion as of April 29. It had $701 million in liquidity, which included $400 million in committed lines of credit.

To facilitate its restructuring, a group led by JP Morgan, along with other lenders will give Toys R Us more than $3 billion in financing.

“Toys R Us is committed to working with its vendors to help ensure that inventory levels are maintained and products continue to be delivered in a timely fashion,” the company said.