Best of the Week
Most Popular
1.Is the Stocks Bull Market Over? Dow Trend Forecast into End January 2015 - Nadeem_Walayat
2.Gold and Silver Stocks Apocalypse Now, Bear Market Review - Rambus_Chartology
3.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
4.Ebola Terror Threat Suicide Bio-Weapons Threatens Multiple 9/11's, Global Plague - Nadeem_Walayat
5.Second-Richest Man Says Mortgages Now a "No Brainer" - Dr. Steve Sjuggerud
6.Gold And Silver Still No End In Sight - Michael_Noonan
7.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
8.The Gold Bug is Set to Bite Back - EWI
9.How Alibaba Could Capitalize on the EBay-PayPal Split - Frank_Holmes
10.The Consequences of the Economic Peace - John_Mauldin
Last 5 days
How Will We Know That the Gold & Silver Price Bottom Is In? - 21st Oct 14
Is Gold as Dead as Florida Hurricanes? - 21st Oct 14
First Swiss Gold Poll Shows Pro-Gold Side In Lead At 45% - 21st Oct 14
The Similarities Between Germany and China - 21st Oct 14
The REAL Reason Why the Stock Market Turned Down - 21st Oct 14
Petrobras is a 'Scheme, Not a Stock' - 21st Oct 14
Stocks Bear Market Indicator Is Off the Mark - 20th Oct 14
Stock Market Ideal Turning Point is at Hand - 20th Oct 14
Investors Quit Complaining, The Environment is Perfect Right Now - 20th Oct 14
Ebola Armageddon Could Trigger a Rebirth in Gold and Silver Prices - 20th Oct 14
Gold vs Euro Risk Due To Possible Return of Italian Lira - Drachmas, Escudos, Pesetas and Punts? - 20th Oct 14
Stocks Rebounded Following Recent Sell-Off, But Will It Last? - 20th Oct 14
U.S. Responsible for West Africa Ebola Outbreak Says Liberian Scientist - 20th Oct 14
Stock Market Intermediate B Wave has Started - 20th Oct 14
Gold Stocks Analysis – FNV, CG, NCM, SBM - 19th Oct 14
Stock Market Primary IV Wave Counter Trend Rally - 19th Oct 14
Gold And Silver - Financial World: House Of Cards Built On Sand - 18th Oct 14
Anatomy of a Stock Market Sell-Off - 18th Oct 14
Why OPEC Has Declared an Oil War on Russia - 18th Oct 14
Gold and Silver Extreme Shorting Peaks - 18th Oct 14
Bitcoin Price Fall to $350? - 18th Oct 14
Tesco Supermarket Crisis Worse To Come as Customers Vanish! - 18th Oct 14
Sheffield Roma Crisis School Place Application's Fraud Perfect Storm - 17th Oct 14
Stock Markets, Commodities and Indicators - 17th Oct 14
“Save Our Swiss Gold ” - Game Changer For Gold? - 17th Oct 14
How to Trade the Ebola Stock Market Sell-Off - 17th Oct 14
When... Not if... Crude Oil Price Drops Below $70 - 17th Oct 14
Either You're The Butcher or You're The Cattle - 17th Oct 14
Gold Benefits from Market Uncertainty - 17th Oct 14
Stock Market Pullback Underway, Euro downside, Commodities - 17th Oct 14
Stock Market Seven Year Cycle and A Correction Ahead? - 17th Oct 14
Three Ways to Play Uranium: Top Stock Picks - 17th Oct 14
America Flirts With Deflation - 17th Oct 14
Why the Fed Should Consider Delaying the End of QE - 16th Oct 14
Gold Prices Since 9-11 - 16th Oct 14
The Inflation Imputation, Dear Saver, May You RIP - 16th Oct 14
Flight To Safety - Gold Rises As Stocks, European Bonds Sink - 16th Oct 14
The March Of History And The End Of Nations - 16th Oct 14
Stocks Bear Markets Move Fast and Are Intensely Emotional - 16th Oct 14
Stocks Got Their Piece – Now It’s Our Turn - 16th Oct 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stocks Epic Bear Market

The Record of Olympic Economics

Politics / Government Spending Aug 01, 2012 - 05:22 AM GMT

By: BATR

Politics Best Financial Markets Analysis Article

As the world economy plunges and the financial markets debate the future of EU, the London Olympics provide a pretext to take a holiday and party all night. The latest example of excess and self-absorbed haughtiness, promotes an agenda of internationalism. The spirit of the games is less about sportsmanship than promotion of indoctrination. The cost to produce such an extravaganza approaches sums that necessitate a bailout from the IMF. The article, Winner's curse? The economics of hosting the Olympic Games, illustrates a disturbing cost for hosting the Games.


"The complete official budget, initially pegged at $3.8 billion for the Games, has nearly quadrupled, and some estimates from British media have set the total cost at as high as $38 billion.

The 1996 Summer Olympics in Atlanta cost $2 billion US. Hosting costs grew to $4.8 billion in Sydney four years later. Athens is estimated to have spend between $15 billion and $32 billion on hosting the 2004 Olympics.

And, at $42 billion, the 2008 Beijing Games are widely thought to be the most expensive ever. Chinese authorities have declined to release the official figures needed to confirm that figure."

The notion that global comradeship is built through athletic competition is the message behind the quadrennial event. Seldom if ever does the TV viewing audience question the enormous sums required to conduct the amusing circus. So, what does the financial community say about the effect of these sports events, especially in these trying times? The analysis in the Guardian, Will the Olympics get the economy growing again? Don't bank on it, provides some answers.

"Citi's Michael Saunders is frank in his assessment: "In our view, the Olympics are likely to be very entertaining. But the Games are not an economic policy."

Saunders has examined the data from 10 Olympics held between 1964 and 2008 and found that although growth tends to rise in the runup to the tournament, the effect starts to fall away even before the Games begin – and afterwards, growth tends to be weaker.

The trend is explained by the fact that many of the positives that come from the Olympics (such as jobs created during the construction phase) are out of the way long before the opening ceremony, while negatives (such as lost productivity as Britons stay glued to their TVs) come during and after the Games. The anticipation of extra revenue from foreign visitors, economists say, also fails to take into account visitors who might have come to the UK anyway and just change the timing of their visit."

Yet in an even more in-depth report, Olympic Economics, The Pre-Games Show, the notorious 'Vampire Squid' of international banksters produces a lengthy analysis.
"Goldman Sachs has put out a 39-page report (PDF) on the subject (plus, somewhat incongruously, athlete interviews). The bank's analysts conclude that games in Munich (1972) and Montreal (1976) lost big bucks, while Los Angeles (1984), Barcelona (1992) and Atlanta (1996) "each made a profit."

Breaking even or making a profit certainly goes a long way to justify the immense expense. However, when governments absorb the losses and cost overruns to produce the symbolic script of worldwide "good will", the propaganda budgets get a bump from their countries treasuries.

So who benefits from the Olympic "Passion Play" process and how does it work in the bidding competition? Andrew Zimbalist, write in Atlantic magazine.

"The city (principal) is not properly represented by the local organizing committee (agent). The committee that nominally represents the city really represents itself and bids according to its sense of the private benefit (of its members) versus the private cost, rather than the city's public benefit versus public cost. Since the private cost is diminutive and the private gain extraordinary, the local organizing committees, on behalf of the cities, are bound to overbid, wiping out any modest, potential economic gains."

Therefore, basic business restraint and prudent judgment is often absent from the marathon race to gain the rewarding decision to go crazy by hosting the Games.

The public has a much different attitude towards the Olympics than the financial movers and shakers. The corporatist jet set loves to merge their interest with that of statist bureaucracies. The Guardian continues and makes an insightful assessment.

"David Cameron started the ball rolling on Thursday with what was billed as the biggest investment conference ever hosted in the UK. The event was a who's who of the global financial system: International Monetary Fund chief Christine Lagarde rubbed shoulders with Mario Draghi, governor of the European Central Bank and Angel Gurría, secretary general of the OECD. There was also an impressive roll-call of business leaders, with Google chairman Eric Schmidt sharing a platform with Cisco's John Chambers."

The centralization of the global economy is supercharged through the figurative meaning of the interlocking rings. The five continents Africa, America, Asia, Australia, and Europe wave their flags under the Olympic banner. These rallies, designed to merge communal synergism under an international symbol, feed the transnational economy. Breaking down national pride may not be easy to see through the repetitive media coverage, but the true intent of holding the Games is to forge a unified system of coordinated financial inclusion.

Just as the budget overruns become the rule for most Olympic venues, the world economic model runs on unsustainable debt. The cavalier attitude toward the economic risks and financial obligations incurred, to light the torch, seems more to do with national ego than practical benefits.

Much like other pet projects of the international community, the Olympics are useful as a training exercise for programming the thinking of rabid and crazed sports buffs. The World (soccer to American observers) Cup, routinely herd psycho fans into confined stadiums. The frequent result engenders a martial law response to chaotic conduct.

The Olympics seeks to instill compliant behavior through more docile means. The accurate assessment of the economic consequences of holding the Olympics more closely resembles a contest of the Hunger Games than Chariots of Fire.

James Hall – August 1, 2012

Discuss or comment about this essay on the BATR Forum

http://www.batr.org

"Many seek to become a Syndicated Columnist, while the few strive to be a Vindicated Publisher"

© 2012 Copyright BATR - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014