If Bernanke really shakes the tree, half the world may fall out ... We no longer have a free market. The world's financial asset prices have become a plaything of central banks and the sovereign wealth funds of a few emerging powers. Julian Callow from Barclays says they are buying $1.8 trillion worth of AAA or safe-haven bonds each year from an available pool of $2 trillion. Nothing like this has been seen before in modern times, if ever. – UK Telegraph

Dominant Social Theme: Oh, this is overwrought. Even conspiratorial.

Free-Market Analysis: We can hardly keep track of how many times the alternative 'Net media, including ourselves, have been proven correct in the past few months.

The war in Afghanistan is an admitted failure; the world is swimming in shale oil; central banking's credibility shattered ... and now one of the most mainstream and powerful newspapers in Britain has published an article admitting that the West's economy is far from free.

Corrupted credit ratings: Standard & Poor's lawsuit and the evidence ... In response to the civil lawsuit filed by the US Department of Justice in February 2013, Standard & Poor's affirms that its ratings were "objective, independent and uninfluenced by conflicts of interest". This column presents empirical evidence opposing this claim. The data suggests a systematic rating bias in favour of the agencies' largest issuer clients. − VoxEU.org

Dominant Social Theme: Okay, these ratings firms need to be more realistic!

Free-Market Analysis: US prosecutors are upset that Standard & Poor's apparently was "over-optimistic" about certain mortgage-backed securities in order to "grow its ratings share" and generate increased fees.

Supposedly, S&P and other ratings agencies should have been firm about market abuses and attempted to explain the reality of the pre-2008 mania surrounding these instruments.

But, of course, this was impossible. Austrian, free-market economics shows us quite clearly that when central banks print too much money, an uncontrollable boom erupts. Only when the market itself collapses do people get a sense of the damage that has been done.

How Cities Are Fixing America ... Mired in partisan division and rancor, the federal government appears incapable of taking bold action to restructure our economy and grapple with changing demography and rising inequality. With each illustration of partisan gridlock and each indication of federal, and also state, unreliability, metros are becoming more ambitious in their design, more assertive in their advocacy, more expansive in their reach and remit. The metro revolution reflects the maturing of U.S. cities and metros in terms of capacity and focus. For 50 years, metropolitan areas relied on their biggest single investor—the federal government—to finance infrastructure, housing, innovation, and human capital. They have dutifully competed for federal grants and aligned their visions and strategies to the federal focus du jour. Now cities and metros are driving the conversation, making transformative investments in the public goods that undergird private investment and growth. – Daily Beast

Dominant Social Theme: American exceptionalism is alive and well and best expressed by its dynamic urban environments.

Free-Market Analysis: It is almost impossible to defend the US federal government these days.

Mired in something like 50 wars, endless corruption, attacking certain ideologies with destructive taxation and spying on whole populations of citizens, even the Daily Beast has apparently given up cultivating a positive image for the American leviathan.

Woz: This is not my America ... Stopped by Spanish language tech journalists at an airport, the Apple co-founder says that after the NSA revelations, he questions his own government and wonders whether it's behaving like a king. As the passions and justifications swirl around the revelations concerning the NSA, the rest of the world sits and wonders. Is only the U.S. involved? Or might, perhaps, every government on Earth be rather keen to use all technological methods to protect its interests? – CNET

Dominant Social Theme: Don't worry, be happy.

Free-Market Analysis: Just the other day, we wrote about how when a culture loses its intellectual "buy in," that culture begins to lose cohesion. The long slide begins.

A feedbacker was kind enough to send us some quotes from legendary free-market economist Ludwig von Mises. He wrote:

"The first socialists were the intellectuals; they and not the masses are the backbone of Socialism."

The dream of a flying bike just became reality as an electric propeller-powered bike goes for a short ride in the air. Pigs may not be flying yet, but a bicycle just recently took to the air in a successful test flight. The flying electric bike is the creation of several Czech companies that have been developing a prototype. The proof-of-concept bicycle looks a bit like a regular bike crossed with a giant RC quadcopter. − YouTube

Dominant Social Theme: That ought to be regulated.

Free-Market Analysis: Here's something that's pretty cool: a flying bike. It seems simple enough to make, using technology that is firmly recognizable.

Once upon a time, such an invention would have appeared in Britain or the US. Today, it takes flight in the Czech Republic. The overwhelming impetus of the modern state, of course, will be to regulate it or even put its makers out of business if they threaten someone else's established profits.

Many years back I was a candidate for a Congressional Fellowship that was administered by a group of prominent academic philosophers. I had made it into the final list of three and flew East to be interviewed, which would decide the matter of who gets the position.

When I sat down in front of the group of philosophers the chair, the now deceased Edmund L. Pincoffs from the University of Texas at Austin, asked me, "What would a libertarian, who wants to restrict the scope of government to basic protection of individual rights, have to advise anyone in Congress? Isn't that quite incongruous?" My answer was along the following lines: "Well, I am one of a not entirely negligible number of Americans with that viewpoint, which itself has a solid tradition in our country, so any member of Congress may benefit from learning of this position, maybe even become convinced it is right."

I was reminded of this experience by a letter to the editor written to The New Republic. The magazine had published an essay, by Peter Beinhart, about Louisiana Rep. Billy Tauzin. The writer recalled that Tauzin had been featured on ABC-TV giving a lecture to a group about how to evade US taxes by taking advantage of overseas tax havens. Given this dastardly act, the author of the letter joined hands with Mr. Beinhart who called for the resignation of Tauzin, only this time on the grounds that he was "teaching the wealthy how to evade taxes."

Ben Bernanke under pressure to spell out QE timeline ... Ben Bernanke under pressure to spell out QE timeline. US stocks jumped and the dollar climbed against the yen on Monday, amid expectations that Federal Reserve chairman Ben Bernanke will spell out how it will decide when to put the brakes on America's quantitative easing programme, at its two-day meeting this week. Ben Bernanke cautioned strongly that halting America's fiscal stimulus measures too suddenly could jeopardise the country's recovery. – UK Telegraph

Dominant Social Theme: One man stands between civilization and chaos.

Free-Market Analysis: Another quietly adulatory article.

One would not think, given the continued coverage of Federal Reserve chairman Ben Bernanke and other powerful central bankers, that the prestige of the entire institution has come under considerable attack in the past decade and the past five years in particular.

U.S. says Taliban agrees to Afghanistan peace talks ... Senior Obama administration officials said Tuesday that the Taliban has agreed to participate in peace talks based in Qatar, a key step forward in the effort to jump-start a political resolution of the war in Afghanistan ahead of U.S. plans to withdraw troops. Officials said direct talks between U.S. officials and Taliban representatives could begin this week in Doha and would be followed soon after by a meeting between the Taliban and the High Peace Council, which will represent the Afghan government in the talks. – LA Times

Dominant Social Theme: Finally, the breakthrough everyone has been waiting for! What a peacemaker this fellow Barack Obama is ...

Free-Market Analysis: The final act of this phony war has commenced, and it is no more sincere than any other part of it. The Taliban "terrorists" have not been defeated and presumably there is no need for them to negotiate in good faith.

Taliban leaders – both Afghan and Pakistan – are contemptuous of Hamid Karzai as a corrupt Western puppet. The chances are that once NATO and the US pull out, Karzai is more likely to find a bullet in the head or a permanent exile in Switzerland with his embezzled billions than a continued position as the leader of the Afghan nation.

EU and US 'in biggest trade deal' ... UK Prime Minister David Cameron has announced plans for what could be "the biggest bilateral trade deal in history" between the EU and the US. He announced the start of formal negotiations on a trade deal worth hundreds of billions of pounds, aimed at boosting exports and driving growth. Mr Cameron said a successful agreement would have a greater impact than all other world trade deals put together. The talks were announced ahead of the G8 summit in Northern Ireland. US President Barack Obama said the first round of negotiations would take place in Washington in July. They aim to conclude by the end of 2014. – BBC

Dominant Social Theme: The wise man of Downing Street has a deal for YOU.

Free-Market Analysis: British Prime Minister David Cameron is under attack on all fronts. The British economy is sprawled on the world stage like road-kill, British unemployment remains agonizingly high and the furor over Britain's continued presence in the European Union is causing Cameron serial headaches.

So what to do? How about a trade agreement? That's what we learn from the BBC in this excerpt above. And not just any trade agreement but the biggest, most expensive and "best" yet.

Tilting at windmills in Germany ... The wheels are falling off of Germany's green energy revolution ... The quiet backwater in the Ruhr, close to Düsseldorf, is the proposed site for the biggest converter station in Europe. This vast installation will transform high-voltage direct current to alternating current. It will be an important link in Germany's new "power highway", a network of transmission lines that will send electricity generated by wind farms in the north of the country, and offshore in the North and Baltic Seas, to the manufacturing belt in the south. Osterath's residents reckon it will be a monstrous eyesore, and intend to stop it. This kind of nimbyism is only one of many problems facing Germany's Energiewende. The literal translation is energy change or turn ... – The Economist

Dominant Social Theme: Green energy can be difficult to implement but is worthwhile, nonetheless!

Free-Market Analysis: This Economist blog article starts out in a promising way by analyzing the reality surrounding Germany's power industry: State policies are contradictory and not working.

In fact, the Energiewende was destined not to work because Germany's energy policy, like Europe's, is basically a political construct. The muddle is complicated by the entire "green" debate. Green alternative power is simply not as reliable or cheap as coal and oil ... or even nuclear.

In the 21st century the two hundred year-old propaganda that the American people control their government has been completely shattered. Both the Bush and Obama regimes have made it unmistakenly clear that the American people don't even influence, much less control, the government. As far as Washington is concerned, the people are nothing but chaff in the wind.

Polls demonstrate that 65% of the US population opposes US intervention in Syria. Despite this clear indication of the people's will, the Obama regime is ramping up a propaganda case for more arming of Washington's mercenaries sent to overthrow the secular Syrian government and for a "no-fly zone" over Syria, which, if Libya is the example, means US or NATO aircraft attacking the Syrian army on the ground, thus serving as the air force of Washington's imported mercenaries, euphemistically called "the Syrian rebels."

Washington declared some time ago that the "red line" that would bring Syria under Washington's military attack was the Assad government's use of chemical weapons of mass destruction against Washington's mercenaries. Once this announcement was made, everyone with a brain immediately knew that Washington would fabricate false intelligence that Assad had used chemical weapons, just as Washington presented to the United Nations the intentional lie via Secretary of State Colin Powell that Saddam Hussein in Iraq had dangerous weapons of mass destruction. Remember National Security Advisor Condi Rice's image of a "mushroom cloud over American cities"? Propagandistic lies were Washington's orders of the day.

"We are going to do it our way, this is our decision," Sveinsson, 45, said in an interview in Brussels today. "This government is not going to keep on pushing forward this application. At some time, there will be a referendum, but I cannot tell you when and by whom." EU leaders had celebrated the prospect of welcoming Iceland -- a developed nation where the economy grew 1.6 percent in 2012 -- as a sign the bloc's appeal isn't limited to poorer nations in the south. Iceland's snub changes that. "It was not easy for me as a person" to learn of the new mood in Reykjavik, EU Enlargement Commissioner Stefan Fule said after meeting Sveinsson last night. He urged the government in Reykjavik not to take "unlimited time" on its EU options... – News of Iceland

Dominant Social Theme: A little bump in the road.

Free-Market Analysis: The mainstream press was in full cry over Edward Snowden late last week, but there was big news regarding Iceland and the EU.

Iceland's new government is no more apt to speed an entry into the EU than previous administrations. Representatives reaffirmed a decision to halt efforts to join the European Union. Reasons included worries over control of Iceland's resources and the continued euro crisis.

IMF warns US economic recovery has been slowed by 'ill-designed' cuts but warns Congress against spending less on infrastructure and education ... IMF managing director Christine Lagarde said: 'The IMF's advice is to slow down but hurry up.' ... The International Monetary Fund said on Friday that an "excessively rapid and ill-designed" deficit reduction plan had hampered the "tepid" recovery in the US economy. – UK Guardian

Dominant Social Theme: Listen to the IMF. They've been getting it right for decades.

Free-Market Analysis: Actually, the IMF has been getting it resolutely wrong for decades. But we are supposed to accept its wisdom because it is large and the governments of countries around the world contribute to it.

For us, that mostly shows the power of the Anglo-American alliance and the ability of the top men of that alliance to convince (intimidate) others into going along with the program.

Syria: The slippery slope to an international crisis ... The proposed talks in Geneva, under joint American and Russian auspices, remain the only realistic opportunity for producing a solution to the civil war in Syria ... With the United Nations this week reporting 93,000 fatalities in Syria since the civil war began, it is arguably somewhat late in the day to be considering intervention on humanitarian grounds. Indeed, President Barack Obama has spent the past two years trying to avoid making the very decision he is now edging towards: how and when to get involved on the side of the anti-Assad forces. The ostensible justification for this dramatic change of policy is apparently compelling evidence that chemical weapons have been used in the conflict, though this has been rumoured for some time. – UK Telegraph

Dominant Social Theme: This war with Syria was unprovoked and unexpected. Too bad.

Free-Market Analysis: We expect the US to go to war fairly directly with Syria any time now. The only real suspense is how US, British and NATO leaders will justify it.

All this palaver and breast-beating is just for show. The West, under its critical mass of generals, politicians and bankers, has been at war with great regularity, especially since the Great Recession began around 2008.

Fitch says China credit bubble unprecedented in modern world history ... China's shadow banking system is out of control and under mounting stress as borrowers struggle to roll over short-term debts, Fitch Ratings has warned. Fitch warned that wealth products worth $2 trillion of lending are in reality a "hidden second balance sheet" for banks, allowing them to circumvent loan curbs and dodge efforts by regulators to halt the excesses. – UK Telegraph

Dominant Social Theme: China is the coming monster on the international stage. A real capitalist success story.

Free-Market Analysis: At the end of this article, we'll reveal where the "malpractice" mentioned in this headline lies. But first, at the risk of repeating ourselves, let us remind readers, "We told you so."

For years we've been writing that the Chinese Miracle is nothing more than the Japanese Miracle writ large and that it would have a similarly messy end. This seemed obvious to us, and increasingly to others.