Alternative generation: disenfranchised youth look to co-ops for work

A new crop of co-ops run by young people present a non-conventional route to viable employment, as youth still suffer the effects of the economic downturn

When graduate Rhiannon Colvin became increasingly frustrated with applying for endless unpaid internships, she took the bold decision to launch her own business, the AltGen co-op.

"Young people are starting to realise that, as long as we continue to fight each other for unpaid or underpaid work, then we remain incredibly powerless. The only way we can change this reality is if we start collaborating, co-operating and working together," says 24-year-old Colvin.

"We've now taken matters into our own hands to create a more sustainable and equal economy, one where our work allows us to generate an income, do what we love and have a positive social impact. Co-operatives are one way of achieving this."

Launched this July as a worker's co-operative, AltGen aims to support 18-29-year-olds to set up their own co-operative businesses as an empowering and collaborative solution to the crippling issue of youth unemployment. Currently 18% of young people aged 16 to 24 are unemployed, compared with the overall national figure of 7%.

A report published earlier this summer by the Institute of Fiscal Studies (IFS) illustrates how young people have taken a disproportionate hit during the economic downturn. The report found that between 2007 and 2013 the employment rate among 22-30 year-olds fell by 4% while among 31-59 year olds it remained stable. Over the same period, young people aged 22-30 saw their household incomes fall by 13% while those aged 31-59 saw a 7% drop. "Pay, employment and incomes have all been hit hardest for those in their twenties," concludes Jonathan Cribb, research economist at the IFS.

One of the first projects that AltGen has unveiled is the Young Co-operators Prize which will award five £2,000 start-up grants to young people who have ideas for potentially successful co-ops. The competition is a collaboration with ten leading universities including Bristol, Goldsmiths and Leeds and Co-operatives UK, the trade body for the UK's co-operative movement.

Read more: http://www.theguardian.com/sustainable-business/alternative-generation-disenfranchised-youth-coops

Credit rating agency downgrades nine Euro-zone countries

by Michael Smith (Veshengro)

London,UK, January 2012 : Credit rating agency Standard & Poor's has downgraded the credit ratings of nine Euro-zone countries, stripping France and Austria of their coveted triple-A status. The status of EU paymaster Germany, however, remains untouched. This is a definite a Black Friday the 13th for the troubled single currency area.

S&P has cut the ratings of Italy, Spain, Portugal and Cyprus by two notches and the standings of France, Austria, Malta, Slovakia and Slovenia by one notch each.

Greece already, if I am not mistaken, has a credit rating of “junk”and are things really not looking well for the Euro now. One can but wonder whether it is not time to take the patient off life-support and allow him to die peacefully.

In another potentially and possibly more ominous setback even the negotiations on a debt swap by private creditors seen as crucial to avert a Greek default that would rock Europe and the world economy broke up without agreement in Athens, although officials said more talks are likely next week.

The truth is that if Greece cannot persuade banks and insurers to accept voluntary losses on their bond holdings, a second international rescue package for the euro zone's most heavily indebted state will unravel, raising the prospect of bankruptcy in late March, when it has to redeem 14.4 billion euros in maturing debt.

The move by S&P has put highly indebted Italy on the same BBB+ level as Kazakhstan and pushes Portugal into junk status.

The credit rating agency has put 14 Euro-zone states on negative outlook for a possible further downgrade, including France, Austria, and still triple-A-rated Finland, the Netherlands and Luxembourg. Germany was the only Euro-country to emerge totally unscathed with its triple-A rating and a stable outlook.

The French finance minister downplayed the downgrade of Europe's second-biggest economy from AAA to AA+ for the first time since 1975 saying that it was far from a catastrophe and claiming that it is an excellent rating.

It would appear that it is business as usual in the make-believe department all over the Euro-zone and no one has the guts too admit that the single currency is in more than serious trouble.

But then, make-believe at this very time the favorite past-time of the governments as they are trying to have the people believe that everything is fine and rosy and that everything is going to be back to normal in a jiffy.

As I keep saying, I have bad news. It is not going to be all well in the end very soon. Far from it and the sooner people – the governments know and are in denial – realize it the better.

© 2012

Downturn Britain

By Michael Smith (Veshengro)

In his speech to the Tory Party Conference 2011 David Cameron finally told the people in the hall, the nation and the world at large what the ordinary person on the street has known for ages.

The Prime Minister has finally noticed that the country, that is to say, Britain, is still in a very deep recession, though to the PM it is a new one; a new recession that is, though it may also be a new one to him that the country is deep in the proverbial mass.

Britain, he said, is back – still, I and the rest of the people, say – in a recession and that the outlook is rather gloomy. Yikes! It took him how long to realize that?

Surprise? Not! We have known that all along and this shows, yet again, how far removed government is from the ordinary people that it took government, and especially the leadership, this long to realize it. With a Prime Minister like that. I am afraid to say, we are all in real trouble.

Fair dues, the Treasury was plundered by the previous Labour regime that ruled – misruled might be better a term – the country for 13 years. But that does not excuse the lack of understanding how the rest of us lives.

The PM then continued to say that we must all apply a “can do” attitude and wartime spirit to overcome this adversity.

I must say that, in a way, he does have a point as to the needed attitude but we all and especially government must come to the realization that this recession is a sign of the times and of a seriously broken economic system and model (see “Broken Economy”).

Britain has been in a downturn ever since the recession began with the credit crunch in 2008/2009 and while it came out a little it has now ended up in a double -dip recession that everyone dreaded but which Mervin King, Governor of the Bank of England, predicted and for which prediction he was castigated.

The truth hurts, as they say, and the truth is that we, as a country, are very much headed down the tube, and this tube is not the London Underground Railway of which I speak.

To our government big boys and girls all of this, and to the Prime Minister especially, seems to have come very much as a surprise and shock even. One can therefore but wonder on which planet or in which parallel universe they actually reside.

Scary, isn't it? And we allow them to run – or should that be ruin – the country. There's but one letter that makes the difference.

© 2011

Headed back toward the double dip?

By Michael Smith (Veshengro)

The weak May jobs report figures are just the latest sign that the recovery has stalled and that the USA are headed for a serious double-dip recession. Is it time for Washington to intervene?

The May jobs report is a disaster – the weakest reading since September. Non-farm payrolls grew only 54,000 last month, according to the Labor Department’s Bureau of Labor Statistics. Private employment rose only 83,000 – the smallest growth since last June. Government payrolls dropped 29,000 and the overall jobless rate rose to 9.1 percent.

Together with plummeting housing prices, falling wages for non-supervisory workers, a paltry 1.8 percent growth in the first quarter, and a precipitous drop in consumer confidence, the picture should be clear to anyone able to see clearly.

The recovery has stalled and while the US are not in a double dip yet, but the odds are increasing.

But is it but the USA that are in such dire straights? I should think not. In Britain things are not better either, despite what the government is trying to tell us with massaged figures.

Heavy job losses in the public sector, pay freezes for at least the next two years, which, in fact, amount to serious drops in pay, with the public sector not taking on those that have lost jobs in the public sector, is just one of the signs.

Prices for everything are on the up, and that relentlessly so, and thus the real value of any pay packet is being reduced more and more almost daily. It is basic food stuff the prices of which are rising more than the costs of luxury items and thus the poor are proportio9nally worse affected and thus worse off.

Consumer confidence is at all all time low and people are not buying, causing the economy to shrink further.

On top of that the Euro zone is in serious trouble and it would appear that, unless the countries of that zone are going to bite the bullet and are prepared to keep bailing out the failing and defaulting nations, the Euro could unravel. This might not, to be very honest, be all that bad a thing and many Germans, for instance, would rather have the Deutsche Mark back today than in a year or never. I can't say that I blame them.

Britain did the best thing by staying out of the Euro and thus the Euro zone. It is just such a shame that we don't have the political will to hit the European Union on the head and leave that club of total madness.

Whatever our politicians may like to tell us, we are still not out of the woods yet, as far as the economy and the recession is concerned and we could go into yet another dip, and a very deep one at that. So let's keep our eyes open and our money with us.

© 2011

Germany braces for second wave of credit crunch

Germany's economics ministry is drawing up a raft of special measures with the Bundesbank to head off a fresh financial crisis, fearing that a loan squeeze by struggling banks will set off a serious credit crunch early next year.

by Michael Smith (Veshengro)

So! Right when the IMF and the British government are trying to tell us, a short while after Germany announced that they are coming out of the recession together with France, the Bundesbank, and they know what they are talking about, puts a rather big damper on things by announcing that things are going south again, more than likely.

That, I think, should have been obvious and the fact that we are not out of the woods as yet and may not be for a very long time to come unless we change our ways.

"The most difficult phase for financing is going to be in the first and second quarter of 2010," said Hartmut Schauerte, the economic state secretary.

"We are working as a government to create instruments that can offset a feared credit crunch or any credit squeeze in sectors of the economy," he said.

Mr Schauerte said firms with weak balance sheets may struggle to roll over loans as they come due in coming months. Negotiations with banks could prove "very difficult".

And this after they have just claimed that they are on the up. Maybe someone should get their act together and maybe the right hand should get to know the left hand.

State support is likely to be concentrated on boosting the capital base of German firms and providing credit insurance for exporters, perhaps to the tune of €250bn to €300bn. "If this service fails, we are going to see dozens of credit collapses," he said.

Axel Weber, Bundesbank chief and a key figure at the European Central Bank, said recently that the economy remained fragile fundamental problems in the credit system had not been resolved.

"I must warn that it is too early to talk about the end of the financial crisis. Unemployment is going to rise as 'Kurzarbeit' expires, and that could hurt consumption," he said, referring to the state scheme that subsidizes firms to keep idle workers on their books.

German politicians have tended to blame the credit crisis on excesses in the US, which exported toxic debt to incompetent Landesbanken through collateralized debt obligations (CDOs) and other exotica of the sub-prime era. But Mr Weber said German has a home-grown problem of its own that has yet to manifest itself.

"The first round of disruption in the bank balance sheets from structured credit products is behind us. Now we are threatened by stress from our domestic credit industry through the rise in the insolvency of firms and households," he told the Süddeutsche Zeitung

"All the banks, even the biggest, must strengthen their defenses. They need higher capital buffers, greater liquidity cushions, and better risk management."

While Mr Weber said Germany was resilient enough to withstand another shock, his comments are a surprise. The Bundesbank has in the past played down suggestions of an incipient credit crunch, despite warnings from the German banking association and the Mittelstand core of engineering and exporting companies.

The revelation that key government agencies are drawing up relief plans overshadowed news that the ZEW index of financial confidence has soared to the highest level in three years.

The headline index jumped from +39.5 to +56.1, although it is unclear whether this gauge tells us anything that cannot be gleaned from the ups and downs of the DAX index of Frankfurt stocks. The ZEW jumped the gun by signaling recovery much too early during the dot-com bust in 2002.

The latest surge reflects the general mood of optimism in the markets and the rebound in industrial production. The problem for Germany is that car scrappage schemes and pent-up orders for German goods built up during the freeze in global trade finance over the Winter may have disguised the underlying weakness of the economy. Unemployment is expected to rise by another million to 4.5m by late next year.

Hans Redeker, currency chief at BNP Paribas, said the credit contraction was eclipsing recovery in Europe's bond market. "At the end of the day, there is not going to be any durable recovery until we see a revival in credit," he said.

And that is not going to happen, I am sure, for a very long time to come. The way things look the recession is going to be a double dip and the latter one is probably going to be a very deep dip. And it could be a very long time before we will come out of the dip and back to normal, if the latter will ever happen.

What we really need to do, I am sure, is to prepare for a new way. We need a new economy and a new system and no, I am not talking about communism or such like.

Personally, I do not think that we will ever get back to how we were and nor do I think that we should try to get back to such a position. A new way is called for an the current situation could be used to lay the foundation for such a new one. Time for a serious change and a return to old values.

© 2009
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Gold and Silver in an Economic Downturn

by Michael Smith (Veshengro)

Those that make a nice living from selling bullion coins try to convince everyone that gold and silver coins (and bullion) is the best way to protect against problems in an economic downturn and when things finally collapse, as they may some day.

Those advocated of gold and silver who have a huge vested interest in other people believing their message as to this always cite the fact that in the recession and depression after WWI – worldwide – and then after WWII in Europe gold and silver, and here especially coins, were used as a means of economic exchange, instead of useless paper money and general currency.

That, however, was then and this is now. In those days in the past gold and silver coins were still or had been not so long ago in official use and circulation and people could relate to the value of those coins and in many places gold and silver was more accepted, anyway, than the paper money of the realm. People could put a value to gold and silver coins of various countries. But, as said, that was then an d this is now, and today things are rather different.

It must also not be forgotten, though, that cigarettes, for instance, had much greater barter value than anything else in Germany, for instance and that this was something the GI made great use of.

Despite what the advocates of gold and silver for use in a meltdown suggest and they do after all have a vested interest anyway gold and silver, even .999 pure coins marked as such, are of no real use to you at all.

Whatever those coin merchants or those preachers of doom and gloom – even though they may be right with the doom and gloom bit – on websites and in books try telling you gold and silver, whether as coins or bullion bars or jewelry, has (virtually) no use in any economic, financial crisis or similar.

So, do not waste you money on it. Gold and silver, and that applies for coins, most of which are no longer legal tender proper, bullion and jewelry, equally, will not save you and yours in a downturn. Proper preparedness and skills, on the other hand will.

Learn the right skills and learn what to store and where and how, including stuff that you can use for barter in the bad times. You do not need to include gold in silver in such preparations. Anyone who tells you different, I am afraid, has no idea of what he is talking about and has a vested interest somewhere as to selling gold and silver (and even platinum).

© 2009
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