UK inflation set to hit five-year high, raising heat on interest rates

Experts predict figure of 3% for September, adding to pressure on Bank of England to hike rates for first time in decade

UK inflation is expected to hit a five-year high this week, outstripping growth in pay packets and putting renewed pressure on the Bank of England to raise interest rates.

City economists forecast that the consumer price index (CPI) will be shown to have risen to 3% in September, up from 2.9% a month earlier, its highest level since 2012.

Related: UK has highest inflation rate among world’s top economies, says OECD

Related: UK cost-of-living crisis grows as dearer imports push inflation to 2.9%

Related: Why central banks are not hitting their 2% inflation target | Nouriel Roubini

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Chris Hedges: Elites “Have No Credibility Left”

Chris Hedges and David North via TruthDig.com,

On Monday, WSWS International Editorial Board Chairman David North interviewed Chris Hedges, the Pulitzer Prize-winning journalist, author, lecturer and former New York Times correspondent. Among Hedges’ best-known books are War is a Force That Gives Us Meaning, The Death of the Liberal Class, Empire of Illusion: the End of Literacy and the Triumph of Spectacle, Days of Destruction, Days of Revolt, which he co-wrote with the cartoonist Joe Sacco, and Wages of Rebellion: the Moral Imperative of Revolt.

In an article published in Truthdig September 17, titled “The Silencing of Dissent,” Hedges referenced the WSWS coverage of Google’s censorship of left-wing sites and warned about the growth of “blacklisting, censorship and slandering dissidents as foreign agents for Russia and purveyors of ‘fake news.’”

Hedges wrote that “the Department of Justice called on RT America and its ‘associates’ – which may mean people like me – to register under the Foreign Agent Registration Act. No doubt, the corporate state knows that most of us will not register as foreign agents, meaning we will be banished from the airwaves. This, I expect, is the intent.”

North’s interview with Hedges began with a discussion of the significance of the anti-Russia campaign in the media.

David North: How do you interpret the fixation on Russia and the entire interpretation of the election within the framework of Putin’s manipulation?

Chris Hedges: It’s as ridiculous as Saddam Hussein’s weapons of mass destruction. It is an absolutely unproven allegation that is used to perpetuate a very frightening accusation—critics of corporate capitalism and imperialism are foreign agents for Russia.

I have no doubt that the Russians invested time, energy and money into attempting to influence events in the United States in ways that would serve their interests, in the same way that we have done and do in Russia and all sorts of other countries throughout the world. So I’m not saying there was no influence, or an attempt to influence events.

But the whole idea that the Russians swung the election to Trump is absurd. It’s really premised on the unproven claim that Russia gave the Podesta emails to WikiLeaks, and the release of these emails turned tens, or hundreds of thousands, of Clinton supporters towards Trump. This doesn’t make any sense. Either that, or, according to the director of national intelligence, RT America, where I have a show, got everyone to vote for the Green Party.

This obsession with Russia is a tactic used by the ruling elite, and in particular the Democratic Party, to avoid facing a very unpleasant reality: that their unpopularity is the outcome of their policies of deindustrialization and the assault against working men and women and poor people of color. It is the result of disastrous trade agreements like NAFTA that abolished good-paying union jobs and shipped them to places like Mexico, where workers without benefits are paid $3.00 an hour. It is the result of the explosion of a system of mass incarceration, begun by Bill Clinton with the 1994 omnibus crime bill, and the tripling and quadrupling of prison sentences. It is the result of the slashing of basic government services, including, of course, welfare, that Clinton gutted; deregulation, a decaying infrastructure, including public schools, and the de facto tax boycott by corporations. It is the result of the transformation of the country into an oligarchy. The nativist revolt on the right, and the aborted insurgency within the Democratic Party, makes sense when you see what they have done to the country.

Police forces have been turned into quasi-military entities that terrorize marginal communities, where people have been stripped of all of their rights and can be shot with impunity; in fact over three are killed a day. The state shoots and locks up poor people of color as a form of social control. They are quite willing to employ the same form of social control on any other segment of the population that becomes restive.

The Democratic Party, in particular, is driving this whole Russia witch-hunt. It cannot face its complicity in the destruction of our civil liberties—and remember, Barack Obama’s assault on civil liberties was worse than those carried out by George W. Bush—and the destruction of our economy and our democratic institutions.

Politicians like the Clintons, Pelosi and Schumer are creations of Wall Street. That is why they are so virulent about pushing back against the Sanders wing of the Democratic Party. Without Wall Street money, they would not hold political power. The Democratic Party doesn’t actually function as a political party. It’s about perpetual mass mobilization and a hyperventilating public relations arm, all paid for by corporate donors. The base of the party has no real say in the leadership or the policies of the party, as Bernie Sanders and his followers found out. They are props in the sterile political theater.

These party elites, consumed by greed, myopia and a deep cynicism, have a death grip on the political process. They’re not going to let it go, even if it all implodes.

DN: Chris, you worked for the New York Times. When was that, exactly?

CH: From 1990 to 2005.

DN: Since you have some experience with that institution, what changes do you see? We’ve stressed that it has cultivated a constituency among the affluent upper-middle class.

CH: The New York Times consciously targets 30 million upper-middle class and affluent Americans. It is a national newspaper; only about 11 percent of its readership is in New York. It is very easy to see who the Times seeks to reach by looking at its special sections on Home, Style, Business or Travel. Here, articles explain the difficulty of maintaining, for example, a second house in the Hamptons. It can do good investigative work, although not often. It covers foreign affairs. But it reflects the thinking of the elites. I read the Times every day, maybe to balance it out with your web site.

DN: Well, I hope more than balance it.

CH: Yes, more than balance it. The Times was always an elitist publication, but it wholly embraced the ideology of neo-conservatism and neoliberalism at a time of financial distress, when Abe Rosenthal was editor. He was the one who instituted the special sections that catered to the elite. And he imposed a de facto censorship to shut out critics of unfettered capitalism and imperialism, such as Noam Chomsky or Howard Zinn. He hounded out reporters like Sydney Schanberg, who challenged the real estate developers in New York, or Raymond Bonner, who reported the El Mozote massacre in El Salvador.

He had lunch every week, along with his publisher, with William F. Buckley. This pivot into the arms of the most retrograde forces of corporate capitalism and proponents of American imperialism, for a time, made the paper very profitable. Eventually, of course, the rise of the internet, the loss of classified ads, which accounted for about 40 percent of all newspaper revenue, crippled the Times as it has crippled all newspapers. Newsprint has lost the monopoly that once connected sellers with buyers. Newspapers are trapped in an old system of information they call “objectivity” and “balance,” formulae designed to cater to the powerful and the wealthy and obscure the truth. But like all Byzantine courts, the Times will go down clinging to its holy grail.

The intellectual gravitas of the paper—in particular the Book Review and the Week in Review—was obliterated by Bill Keller, himself a neocon, who, as a columnist, had been a cheerleader for the war in Iraq. He brought in figures like Sam Tanenhaus. At that point the paper embraced, without any dissent, the utopian ideology of neoliberalism and the primacy of corporate power as an inevitable form of human progress. The Times, along with business schools, economics departments at universities, and the pundits promoted by the corporate state, propagated the absurd idea that we would all be better off if we prostrated every sector of society before the dictates of the marketplace. It takes a unique kind of stupidity to believe this. You had students at Harvard Business School doing case studies of Enron and its brilliant business model, that is, until Enron collapsed and was exposed as a gigantic scam. This was never, really, in the end, about ideas. It was about unadulterated greed. It was pushed by the supposedly best educated among us, like Larry Summers, which exposes the lie that somehow our decline is due to deficient levels of education. It was due to a bankrupt and amoral elite, and the criminal financial institutions that make them rich.

Critical thinking on the op-ed page, the Week in Review or the Book Review, never very strong to begin with, evaporated under Keller. Globalization was beyond questioning. Since the Times, like all elite institutions, is a hermetically sealed echo chamber, they do not realize how irrelevant they are becoming, or how ridiculous they look. Thomas Friedman and David Brooks might as well write for the Onion.

I worked overseas. I wasn’t in the newsroom very much, but the paper is a very anxiety-ridden place. The rules aren’t written on the walls, but everyone knows, even if they do not articulate it, the paper’s unofficial motto: Do not significantly alienate those upon whom we depend for money and access! You can push against them some of the time. But if you are a serious reporter, like Charlie Leduff, or Sydney Schanberg, who wants to give a voice to people who don’t have a voice, to address issues of race, class, capitalist exploitation or the crimes of empire, you very swiftly become a management problem and get pushed out. Those who rise in the organization and hold power are consummate careerists. Their loyalty is to their advancement and the stature and profitability of the institution, which is why the hierarchy of the paper is filled with such mediocrities. Careerism is the paper’s biggest Achilles heel. It does not lack for talent. But it does lack for intellectual independence and moral courage. It reminds me of Harvard.

DN: Let’s come back to this question of the Russian hacking news story. You raised the ability to generate a story, which has absolutely no factual foundation, nothing but assertions by various intelligence agencies, presented as an assessment that is beyond question. What is your evaluation of this?

CH: The commercial broadcast networks, and that includes CNN and MSNBC, are not in the business of journalism. They hardly do any. Their celebrity correspondents are courtiers to the elite. They speculate about and amplify court gossip, which is all the accusations about Russia, and they repeat what they are told to repeat. They sacrifice journalism and truth for ratings and profit. These cable news shows are one of many revenue streams in a corporate structure. They compete against other revenue streams. The head of CNN, Jeff Zucker, who helped create the fictional persona of Donald Trump on “Celebrity Apprentice,” has turned politics on CNN into a 24-hour reality show. All nuance, ambiguity, meaning and depth, along with verifiable fact, are sacrificed for salacious entertainment. Lying, racism, bigotry and conspiracy theories are given platforms and considered newsworthy, often espoused by people whose sole quality is that they are unhinged. It is news as burlesque.

I was on the investigative team at the New York Times during the lead-up to the Iraq War. I was based in Paris and covered Al Qaeda in Europe and the Middle East. Lewis Scooter Libby, Dick Cheney, Richard Perle and maybe somebody in an intelligence agency, would confirm whatever story the administration was attempting to pitch. Journalistic rules at the Times say you can’t go with a one-source story. But if you have three or four supposedly independent sources confirming the same narrative, then you can go with it, which is how they did it. The paper did not break any rules taught at Columbia journalism school, but everything they wrote was a lie.

The whole exercise was farcical. The White House would leak some bogus story to Judy Miller or Michael Gordon, and then go on the talk shows to say, ‘as the Times reported….’ It gave these lies the veneer of independence and reputable journalism. This was a massive institutional failing, and one the paper has never faced.

DN: The CIA pitches the story, and then the Times gets the verification from those who pitch it to them.

CH: It’s not always pitched. And not much of this came from the CIA. The CIA wasn’t buying the “weapons of mass destruction” hysteria.

DN: It goes the other way too?

CH: Sure. Because if you’re trying to have access to a senior official, you’ll constantly be putting in requests, and those officials will decide when they want to see you. And when they want to see you, it’s usually because they have something to sell you.

DN: The media’s anti-Russia narrative has been embraced by large portions of what presents itself as the “left.”

CH: Well, don’t get me started on the American left. First of all, there is no American left—not a left that has any kind of seriousness, that understands political or revolutionary theories, that’s steeped in economic study, that understands how systems of power work, especially corporate and imperial power. The left is caught up in the same kind of cults of personality that plague the rest of society. It focuses on Trump, as if Trump is the central problem. Trump is a product, a symptom of a failed system and dysfunctional democracy, not the disease.

If you attempt to debate most of those on the supposedly left, they reduce discussion to this cartoonish vision of politics.

The serious left in this country was decimated. It started with the suppression of radical movements under Woodrow Wilson, then the “Red Scares” in the 1920s, when they virtually destroyed our labor movement and our radical press, and then all of the purges in the 1950s. For good measure, they purged the liberal class—look at what they did to Henry Wallace—so that Cold War “liberals” equated capitalism with democracy, and imperialism with freedom and liberty. I lived in Switzerland and France. There are still residues of a militant left in Europe, which gives Europeans something to build upon. But here we almost have to begin from scratch.

I’ve battled continuously with Antifa and the Black Bloc. I think they’re kind of poster children for what I would consider phenomenal political immaturity. Resistance is not a form of personal catharsis. We are not fighting the rise of fascism in the 1930s. The corporate elites we have to overthrow already hold power. And unless we build a broad, popular resistance movement, which takes a lot of patient organizing among working men and women, we are going to be steadily ground down.

So Trump’s not the problem. But just that sentence alone is going to kill most discussions with people who consider themselves part of the left.

The corporate state has made it very hard to make a living if you hold fast to this radical critique. You will never get tenure. You probably won’t get academic appointments. You won’t win prizes. You won’t get grants. The New York Times, if they review your book, will turn it over to a dutiful mandarin like George Packer to trash it—as he did with my last book. The elite schools, and I have taught as a visiting professor at a few of them, such as Princeton and Columbia, replicate the structure and goals of corporations. If you want to even get through a doctoral committee, much less a tenure committee, you must play it really, really safe. You must not challenge the corporate-friendly stance that permeates the institution and is imposed through corporate donations and the dictates of wealthy alumni. Half of the members of most of these trustee boards should be in prison!

Speculation in the 17th century in Britain was a crime. Speculators were hanged. And today they run the economy and the country. They have used the capturing of wealth to destroy the intellectual, cultural and artistic life in the country and snuff out our democracy. There is a word for these people: traitors.

DN: What about the impact that you’ve seen of identity politics in America?

CH: Well, identity politics defines the immaturity of the left. The corporate state embraced identity politics. We saw where identity politics got us with Barack Obama, which is worse than nowhere. He was, as Cornel West said, a black mascot for Wall Street, and now he is going around to collect his fees for selling us out.

My favorite kind of anecdotal story about identity politics: Cornel West and I, along with others, led a march of homeless people on the Democratic National Convention session in Philadelphia. There was an event that night. It was packed with hundreds of people, mostly angry Bernie Sanders supporters. I had been asked to come speak. And in the back room, there was a group of younger activists, one who said, “We’re not letting the white guy go first.” Then he got up and gave a speech about how everybody now had to vote for Hillary Clinton. That’s kind of where identity politics gets you. There is a big difference between shills for corporate capitalism and imperialism, like Corey Booker and Van Jones, and true radicals like Glen Ford and Ajamu Baraka. The corporate state carefully selects and promotes women, or people of color, to be masks for its cruelty and exploitation.

It is extremely important, obviously, that those voices are heard, but not those voices that have sold out to the power elite. The feminist movement is a perfect example of this. The old feminism, which I admire, the Andrea Dworkin kind of feminism, was about empowering oppressed women. This form of feminism did not try to justify prostitution as sex work. It knew that it is just as wrong to abuse a woman in a sweatshop as it is in the sex trade. The new form of feminism is an example of the poison of neoliberalism. It is about having a woman CEO or woman president, who will, like Hillary Clinton, serve the systems of oppression. It posits that prostitution is about choice. What woman, given a stable income and security, would choose to be raped for a living? Identity politics is anti-politics.

DN: I believe you spoke at a Socialist Convergence conference where you criticized Obama and Sanders, and you were shouted down.

CH: Yes, I don’t even remember. I’ve been shouted down criticizing Obama in many places, including Berkeley. I have had to endure this for a long time as a supporter and speech writer for Ralph Nader. People don’t want the illusion of their manufactured personalities, their political saviors, shattered; personalities created by public relations industries. They don’t want to do the hard work of truly understanding how power works and organizing to bring it down.

DN: You mentioned that you have been reading the World Socialist Web Sitefor some time. You know we are quite outside of that framework.

CH: I’m not a Marxist. I’m not a Trotskyist. But I like the site. You report on important issues seriously and in a way a lot of other sites don’t. You care about things that are important to me—mass incarceration, the rights and struggles of the working class and the crimes of empire. I have read the site for a long time.

DN: Much of what claims to be left—that is, the pseudo-left—reflects the interests of the affluent middle class.

CH: Precisely. When everybody was, you know, pushing for multiculturalism in lead institutions, it really meant filtering a few people of color or women into university departments or newsrooms, while carrying out this savage economic assault against the working poor and, in particular, poor people of color in deindustrialized pockets of the United States. Very few of these multiculturalists even noticed. I am all for diversity, but not when it is devoid of economic justice. Cornel West has been one of the great champions, not only of the black prophetic tradition, the most important intellectual tradition in our history, but the clarion call for justice in all its forms. There is no racial justice without economic justice. And while these elite institutions sprinkled a few token faces into their hierarchy, they savaged the working class and the poor, especially poor people of color.

Much of the left was fooled by the identity politics trick. It was a boutique activism. It kept the corporate system, the one we must destroy, intact. It gave it a friendly face.

DN: The World Socialist Web Site has made the issue of inequality a central focus of its coverage.

CH: That’s why I read it and like it.

DN: Returning to the Russia issue, where do you see this going? How seriously do you see this assault on democratic rights? We call this the new McCarthyism. Is that, in your view, a legitimate analogy?

CH: Yes, of course it’s the new McCarthyism. But let’s acknowledge how almost irrelevant our voices are.

DN: I don’t agree with you on that.

CH: Well, irrelevant in the sense that we’re not heard within the mainstream. When I go to Canada I am on the CBC on prime time. The same is true in France. That never happens here. PBS and NPR are never going to do that. Nor are they going to do that for any other serious critic of capitalism or imperialism.

If there is a debate about attacking Syria, for example, it comes down to bombing Syria or bombing Syria and sending in troops, as if these are the only two options. Same with health care. Do we have Obamacare, a creation of the Heritage Foundation and the pharmaceutical and insurance industries, or no care? Universal health care for all is not discussed. So we are on the margins. But that does not mean we are not dangerous. Neoliberalism and globalization are zombie ideologies. They have no credibility left. The scam has been found out. The global oligarchs are hated and reviled. The elite has no counterargument to our critique. So they can’t afford to have us around. As the power elite becomes more frightened, they’re going to use harsher forms of control, including the blunt instrument of censorship and violence.

DN: I think it can be a big mistake to be focused on the sense of isolation or marginalization. I’ll make a prediction. You will have, probably sooner than you think, more requests for interviews and television time. We are in a period of colossal political breakdown. We are going to see, more and more, the emergence of the working class as a powerful political force.

CH: That’s why we are a target. With the bankruptcy of the ruling ideology, and the bankruptcy of the American liberal class and the American left, those who hold fast to intellectual depth and an examination of systems of power, including economics, culture and politics, have to be silenced.

 

Meet The 31-Year-Old Austrian Anti-Immigrant Who Just Became The World’s Youngest Leader

As discussed earlier, Austria’s young conservative star, Sebastian Kurz, is now assured of becoming the country’s next leader, projections of Sunday’s parliamentary election result showed, but his party is far short of a majority and is likely to seek a coalition with the resurgent far right.

Sebastian Kurz arrives to cast his ballot on Oct. 15.

To his supporters, Kurz is Austria’s Macron: a one-man political phenomenon who is the only thing standing between the country’s resurgent nationalists and power. But to his detractors he is the Austrian Trump, who has hijacked one of the country’s two main parties and refashioned it in his own image. His critics say he is only holding the populists back by adopting their anti-immigrant rhetoric and policies.

By taking a hard line on immigration that commingled his campaign with that of the Freedom Party (FPO), 31-year old Foreign Minister Kurz managed to propel his People’s Party to first place and draw some support away from an FPO buoyed by Europe’s migration crisis. Both parties increased their share of the vote from the last parliamentary election in 2013, marking a sharp shift to the right. Chancellor Christian Kern’s Social Democrats were in a close race with the FPO for second place.

Kurz now has a mandate to form a coalition, replace Social Democrat Christian Kern as chancellor and become the world’s youngest government leader.

With the Freedom Party poised to return to government for the first time since 2005, congratulations poured in from European nationalists including France’s Marine Le Pen and Geert Wilders in the Netherlands, while the World Jewish Congress expressed concern. For German Chancellor Angela Merkel, the result may chip away at a key ally’s pro-European stance in the years ahead.

Frauke Petry, a former head of the anti-immigration Alternative for Germany party, which drew inspiration from its Austrian counterpart, posted congratulations on Twitter. Ronald Lauder, who heads the World Jewish Congress, said the Freedom Party is “full of xenophobes and racists. It is sad and distressing that such a platform should receive more than a quarter of the vote and become the country’s second party,” he said in an emailed statement. “My only hope is that they won’t end up in government.”

While Sunday’s projected result doesn’t guarantee a coalition with the Freedom Party, Kurz has a mandate to form a government after an early election he triggered by breaking up a coalition with the Social Democrats this year. The final tally may still be influenced by postal ballots, which will only be counted on Monday.

“This is a strong mandate for us to bring about change in this country,” Kurz told cheering supporters in Vienna as the results came in. “It’s about establishing a new political style, a new culture. It is our task to work with all others for our country,” Kurz told his supporters, without revealing which way he was leaning on coalition talks.

Austria, one of Europe’s wealthiest nations of 8.7 million people, whose capital Vienna is ranked every year among the top 3 cities in which to live, was a gateway into Germany for more than 1 million people during the migration crisis that began in 2015. Many of them were fleeing war and poverty in the Middle East and elsewhere. Austria also took in roughly 1 percent of its population in asylum seekers in 2015, one of the highest proportions on the continent. Many voters say the country was overrun.

Kurz’s strategy of focusing on that issue paid off.

Meanwhile, the FPO was short of its record score of 26.9 percent, achieved in 1999, but still has a good chance of entering government for the first time in more than a decade. The OVP and the Social Democrats are at loggerheads, meaning the FPO is likely to be kingmaker. FPO leader Heinz-Christian Strache, who has accused Kurz of stealing his party’s ideas, declined to be drawn on his preferred partner.

“Anything is possible,” he told ORF. “We are pleased with this great success and one thing is clear: nearly 60 percent of the Austrian population voted for the FPO program.”

“There won’t be a debate to leave the EU, but the Freedom Party is strong enough to demand significant concessions” and may lead Austria to align more often with eastern European countries that have challenged Merkel on issues including migration, said Thomas Hofer, a political consultant in Vienna. “Austria has mostly been an ally of Germany for decades, but that picture could change more often now,” Hofer said.

Austria’s two big parties, the People’s Party and the Social Democrats, have governed together for 44 of the 72 years since World War II. While Kurz and Freedom leader Heinz-Christian Strache might shake up Austria’s cozy political order, they broadly agree in pledging business-friendly policies, notably to scrap corporate taxes on retained profits. They’ll also stay in the German-led camp favoring fiscal austerity in the euro area.

* * *

So who is Kurz?

Kurz, dubbed both the “Conservative Macron” and “Austrian Trump” due to his age and his party reform, said: ‘I would of course like to form a stable government. If that cannot be done then there are other options,’ adding that he planned to talk to all parties in parliament but would first wait for a count of postal ballots that begins on Monday.

The young leader has pledged to cut benefits for all foreigners in Austria and has vowed to stop the European Union meddling in the country’s politics.  

In his victory speech, he said: “I can only say, I am really overwhelmed. We campaigned for several months.”

“We built a massive movement. We had a goal to be the first ones over the (finish) line on October 15. We have made the impossible possible. Thank you for all your work and for this historic success. Today is not about triumphing over others. But today is the day for real change in our country. Today has given us a strong mandate to change this country, and I thank you for that. We were handed a great responsibility from the voters, and we should all be aware of it. We should also be aware that a lot of people have put their hopes into our movement. I can promise you that I will fight with all my strength and all my commitment for change in this country, and I want to invite you all to come along this path together with me.”

Kurz also wants to slash Austria’s red tape and keep the EU out of national affairs.

At 31, Kurz is young even by the standards of Europe’s recent youth movement, which saw Macron enter the Elysee Palace at the age of 39 and Christian Lindner, 38, lead Germany’s liberal Free Democrats (FDP) back into the Bundestag.

Kurz and Lindner showed that young new faces can inject dynamism into old establishment parties that have lost their way with voters.  Kurz rebranded the OVP as the New People’s Party and changed its colours from black to turquoise.  Lindner used trendy black-and-white campaign posters that showed him staring at his smartphone to revitalise the FDP’s image.

Macron, who formed his own political movement, was able to paint himself as a rebel outsider despite having served for four years under failed French Socialist Francois Hollande.

By taking a hard line on immigration that left little daylight between him and the far-right Freedom Party (FPO), 31-year-old Foreign Minister Kurz managed to propel his People’s Party to first place and draw some support away from an FPO buoyed by Europe’s migration crisis. Both parties increased their share of the vote from the last parliamentary election in 2013, marking a sharp shift to the right. Chancellor Christian Kern’s Social Democrats were in a close race with the FPO for second place.

Today Kurz was pictured voting in the Austrian capital Vienna alongside his girlfriend Susanne Thier – a finance ministry worker who he met at the age of 18.


Sebastian Kurz, 31, is set to take power and form an alliance with the far-right.
He is pictured today with his girlfriend Susanne Thier, a finance ministry worker

Without revealing which way he was leaning on coalition talks, the 31-year-old told his supporters: “It is our task to work with all others for our country.”

* * *

Earlier

The front runner in Austria’s Sunday election ended his campaign with a familiar message : Sebastian Kurz pledged to make Austria great again. He is set to become the world’s youngest leader, ahead of France’s Emmanuel Macron, who is 39… oh and North Korea’s 34-year-old Kim Jong-un, of course.

“I want to put Austria back on top,” he told an adoring crowd in Wiener Neustadt according to the Telegraph. “I want to provide security and order, because the Austrian people deserve it.”

Sebastian Kurz

Austrians are voting Sunday in the country’s National Council elections, where according to recent polls the country’s 6.4 million voters are likely to ditch the current coalition in favor of a new government backed by anti-immigration nationalists and headed by a 31-year-old Millennial.

Ahead of today’s election results, the conservative candidate of the Austrian People’s Party (OVP), 31-year-old Sebastian Kurz, is leading the polls with Social Democratic Party (SPO) and the right-wing anti-immigrant Freedom Party (FPO) battling to secure second place. Polls suggest Kurz will lead his conservative People’s Party to victory in Sunday’s election: a victory by the millennial could lead to the unwind of a decade of Social Democratic-led administrations “that revived the economy but struggled with issues over immigration and welfare” and result in the anti-immigrant Freedom Party becoming a part of the coalition government for the first time in history.

To his supporters, Kurz is Austria’s Macron: a one-man political phenomenon who is the only thing standing between the country’s resurgent nationalists and power. But to his detractors he is the Austrian Trump, who has hijacked one of the country’s two main parties and refashioned it in his own image. His critics say he is only holding the populists back by adopting their anti-immigrant rhetoric and policies.

After a surge of support for populist candidates in elections this year in the Netherlands, France and Germany, Austria looks like it will go one further and elect an anti-immigration alliance. The biggest winner will be the aspiring 31-year-old Kurz, who has been Austria’s Minister for Foreign Affairs and Integration since 2013, and who is leading his political campaign along the center-right principles which seem to exploit the refugee issue.

Sebastian Kurz, 31, Austria’s foreign minister and leader of the People’s Party,
greets supporters during his final campaign event in Vienna on Oct. 13

A recent survey by Meinungsraum conducted for GMX.at shows that FPO might secure around 28.5% of the vote, followed by OVP with 26.5%. SPO is expected to attract roughly 20% of the vote. Another poll by Research Affairs/Österreich predicts OVP to secure around 33% of the vote. FPO is predicted to come in second with around 27% , followed by SPO with 23% of the vote.

“People are worried about the future and that is the currency that matters in this election,” said Christoph Hofinger, head of the SORA polling institute in Vienna. “The debate is revolving around the issue of fairness, and a lot is also linked to migration.”

Back in May, Kurz called for a snap election amid tensions with coalition partner, the Social Democrats. The young politician previously backed plans to block refugee routes into Europe and supported a ban on full-face veils. He also supports cracking down on radical Islam, echoing FPO sentiments and luring in nationalist voters.

For the past two years, the issue of how to deal with the influx of migrants has been among the most sensitive in Austrian society. The swell of anxiety over immigration to Austria began building 2015, when almost 70,000 mostly-Muslim refugees sought asylum from war-torn countries such as Syria, Afghanistan and Iraq. Schools and hospitals in the nation of 8.7 million struggled to accommodate the newcomers, and disagreements over whether it was fair to give immigrants generous welfare support dominate the media.

As a result, voters have gravitated toward promises by both the People’s Party and Freedom to limit the number of immigrants Austria receives and force newcomers to adapt local customs more quickly.

Leading FPO candidate Heinz-Christian Strache gained massive support ahead of the election by focusing on the country’s immigration policies and on issues such as unemployment, minimum wage and pensions. The party, founded by a former Nazi SS member after the end of the World War II, stuck the nerve of the electorate by proposing to stop immigration and by speaking out against Islam. The FPO support grew to unprecedented levels following EU-wide ‘Open Door’ migrant policy championed by Germany in wake of 2015 refugee crisis.

While the biggest number of migrants was welcomed by Berlin, Austria received nearly 150,000 asylum requests since 2015. Comprising just over 1 percent of the population, their presence in the country became the number one debated issue in the election.

Meanwhile, the incumbent chancellor of Austria and chairman of the Social Democratic Party, Christian Kern, is virtually assured to lose his place as the head of the government. Unlike his rivals, Kern advocates a much softer stand on migration, instead placing emphasis on employment and the economy. Kern, 51, a former business executive plucked from the national railroad by the Social Democrats in May 2016, has been dogged by sloppy campaign management. Despite overseeing faster growth in the export-oriented economy, Kern has struggled to connect with voters. His No. 1 goal is achieving full employment, since “modernizing the country with investment in education, security, health care and pensions” depends on it, Kern said late Thursday in the campaign’s final debate.

“Austria deserves someone who is ready to take on real responsibility for the population,” Strache said in a parliamentary speech this week, in which he chided Kern for letting thousands of refugees enter Austria, transported on the national railroad he ran before becoming chancellor.

Regardless of performance in Sunday’s election, the three main parties must work together to form a new coalition government. Neither the OVP nor the SPO has ruled out a coalition with the FPO, which may play the role of the kingmaker at the end of the day since as the revival of OVP/ SPO coalition seems unlikely. Other parties such as the liberal NEOS (The New Austria and Liberal Forum) and the Greens are expected to secure single digits.

Compared with 10 years ago, more Austrians say they feel like they’re not being heard and are in search of law-and-order leadership, a SORA institute study showed. More than two-fifths of voters declared their desire for a “strongman” leader, according to the research, periodically commissioned by the federal government to gauge public attitudes and consciousness about the country’s Nazi history.

 

Step forward Kurz, the foreign minister who’s distanced himself from the People’s Party’s leadership and forged similar views with Freedom’s Strache on immigration. Both men want to restrict immigrant access to Austria’s social-security system and impose tighter policing on the country’s borders. The Freedom Party came within 30,000 votes of winning the presidency, a mostly ceremonial post, in a run-off vote last year.

In Austria, anyone over the age of 16 is eligible to vote in roughly 13,000 voting locations throughout the Alpine nation. There are about 6.4 million voters, and those who cast their ballots will decide 183 contested seats at the National Council.

The U.S. Owes UNESCO Half A Billion Dollars

This week, the U.S. and Israel announced that they would be withdrawing from UNESCO, citing 'continuing anti-Israel bias'.

As Statista's Niall McCarthy notes, the move comes as a major blow to the organization which is known for designating cultural sites around the world such as the Grand Canyon or ancient Palmyra in Syria.

The U.S. has been expected to pay the bulk of UNESCO's budget for years and it cancelled its financial contributions back in 2011 in protest of Palestine's admission as a full member.

In the years since, it has amassed significant arrears of over $500 million…

Infographic: The U.S. Owes UNESCO Half A Billion Dollars  | Statista

You will find more statistics at Statista

This year, the UK, Japan and Brazil have all failed to pay their contributions so far, accrueing nearly $70 million of arrears between them.

This isn't the first time the U.S. has turned its back on UNESCO.

The country also left the organization under Ronald Reagan in the 1980s before rejoining under George W. Bush in 2003.

The latest withdrawal will come into effect at the very end of 2018.

Overheating China PPI Sends 10Y Yields To 30 Month Highs As Banks Inject Another Quarter Trillion Dollars In Loans

Despite a disappointing US CPI report on Friday, which saw core inflation miss once again despite an expected spike due to the “hurricane effect”, moments ago China reported that in September, its CPI printed at 1.6% Y/Y, in line with expectations, and down from, 1.8% in August largely due to high year-over-year base effects, but it was PPI to come in smoking hot, jumping from 6.3% last month to 6.9% Y/Y, slamming expectations of a 6.4% print and just shy of the highest forecast, driven by the recent surge in commodity costs and strong PMI surveys.

While there has been no reaction in the Yuan, either on shore or off, the stronger than expected PPI has pushed China’s 10Y yield to the highest in 30 months, or since April of 2015.

Adding fuel to the flame was PBOC head Zhou Xiaochuan who said earlier that China’s GDP would pick up from the 6.9%  figure recorded in the first six months of the year “thanks to a boost from household spending”, according to a synopsis of his comments at the G30 International Banking Seminar posted to the People’s Bank of China website on Monday.” The reason why his comments have impacted the long-end is that the reported, and completely fabricated number, is higher than the previous consensus forecast of a goalseeked Q3 Chinese GDP of 6.8%.

And while spiking Chinese yields wouldn’t be concerned if China was indeed deleveraging as the Communist Party and the PBOC claim it is doing, the reality is, of course, that China continues to add more and more debt as the latest weekend credit numbers out of the PBOC revealed. As Bloomberg reported earlier, China’s broadest credit aggregated, Total Social Financing, jumped to 1.82 trillion yuan, or over a quarter trillion dollars in September ($276BN to be precise), vs a Wall Street estimate of 1.57 trillion yuan and 1.48 trillion yuan the prior month. New yuan loans also beat expectations, at 1.27 trillion yuan, versus a projected 1.2 trillion yuan, while for the first time in months, the broader M2 money supply did not hit fresh fresh record lows, and instead beat expectations, rising to 9.2% from an all time low of 8.9%.

Just as notable, after China’s shadow banking credit appeared to have finally been tamed after several months of contraction, shadow banking finance saw a pick-up in Sept (trust loans, entrusted loans and undiscounted bills), which accounted for 22% of Sept TSF vs. 18% in August. This was due mostly to milder deleveraging pace post the completion of self-checking of CBRC regs.

Commenting on the latest burst of credit creation by China, Kenneth Courtis, chairman of Starfort Investment Holdings and a former Asia vice chairman for Goldman Sachs Group, said that “Momentum continues to be very strong. Loan demand of the private sector has finally turned up in recent months.”

It also means that just two weeks after the PBOC cuts its RRR for most banks in an unexpected monetary easing on Sept 30, “there is little hope of further policy easing in the fourth quarter as the monetary policy is very accommodative,” said Zhou Hao, an economist at Commerzbank AG in Singapore. “There could be even a tightening bias.”

Of course, confirming what we have been saying for years, Christopher Balding who is an associated professor in Peking Univeristy in Shenzhen said that “deleveraging is not happening if we look at any measure of credit growth” and that “lending in 2017 has actually accelerated significantly from 2016.” This is shown in the chart below, which confirms that to keep its GDP at 6.9% or some other goalseeked number, China has to inject more than double that amount in credit every single month, in this case 15%. The biggest question is what happens to China’s credit impulse after the 19th Party Congress which begins on Wednesday.

When looking at the boost in household spending noted above by Zhou Xiaochuan, all of this is the result of a surge in household lending: “Household short-term loans have increased too rapidly, with some funds being invested in stock and property markets,” said Wen Bin, a researcher at China Minsheng Banking Corp. in Beijing. “Regulators have started to pay attention to the sector and required banks to strengthen credit review. I think the momentum will show signs of slowing in the fourth quarter.”

Commenting on the recent burst in Chinese household leverage, where short-term household loans soared to 1.53 trillion yuan, versus 524.7 billion yuan this time one year ago, Deutsche Bank’s Hans Fan writes that “noticeably China households are levering up quickly. We welcome the personal loans driven by genuine consumption growth, but there may be a notable portion of short-term consumer loans that were used to finance property purchases, which in our view contains higher risks.” 


Some more details:

A breakdown by borrower suggests household and corporate sectors continued to lever up, making up 31%/41% of new system credit in Sept (35%/38% in Aug). For households, while mortgage growth had slowed, s/t retail loan growth accelerated to 17.6% yoy in Sept (vs. 15.8% in Aug or 7.3% in 1Q17) to make up c.10% of credit creation. We attribute this to both decent consumption growth with rising credit penetration and property-related lending. We estimate 1/3 of new consumption loans may be used to finance purchases of second homes. However, PBOC and local CBRC offices have started to crack down on property-related consumer loans in September and we expect consumer loan growth momentum to moderate in the coming months.

However, as so often happens in China, this surging leverage “sugar high” will not last, as “regulatory crackdown on property-related consumer loans together with monetary policy staying neutral lead us to expect slower credit growth in 4Q17.” The implications for China’s economy and the global credit impulse will be adverse, and will lead to a global economic slowdown just as all central banks enter tightening moment together.

Finally, for those wondering what the biggest timebomb in the global financial system was, is and will be until such time as it finally blows up, here is a lovely up close schematic courtesy of Deutsche Bank.