June 29, 2008
Elaine Meinel Supkis
Good old boy Flat Earth We Shall Win In Two Months Friedman of the NYT is concerned about...global inflation! Wow! He also notices the US is deep in the red thanks to the flat earth free trade he promotes and pushes! Will he commit suicide like a good Japanese Samurai who screws up so badly? Nope! He wants us to shift gears and do alternative energy! Buy solar panels and wind mills from China, I suppose? Or Japan? Or how about Europe? They have them! And again, we look at charts that clearly show how demented prognosticators for peering into the future really are. Demented, to say the least. And the NYT frets about nations hoarding food and fuel when there is raging inflation. Duh. And the rich guy who owns Pimco sent a letter to Obama warning him to not spend too much money. Too bad Gross didn't send Bush a warning, too, 7 years ago.
My fellow Americans: We are a country in debt and in decline — not terminal, not irreversible, but in decline. Our political system seems incapable of producing long-range answers to big problems or big opportunities. We are the ones who need a better-functioning democracy — more than the Iraqis and Afghans. We are the ones in need of nation-building. It is our political system that is not working.
I continue to be appalled at the gap between what is clearly going to be the next great global industry — renewable energy and clean power — and the inability of Congress and the administration to put in place the bold policies we need to ensure that America leads that industry.
“America and its political leaders, after two decades of failing to come together to solve big problems, seem to have lost faith in their ability to do so,” Wall Street Journal columnist Gerald Seib noted last week. “A political system that expects failure doesn’t try very hard to produce anything else.”
So many people trust this con artist. Why are we 'a country in debt and in decline' in the first place? Before 'free trade' took over, we had no trade deficit. As I showed clearly in this week's articles detailing past Federal Reserve speeches, the US decided to cope with suppressing inflation by the neat trick of devaluing the currency abroad while simultaneously opening up the US to 'foreign competition' that was designed to force prices downwards via dropping union wages. To clinch the deal, the US media had to herd the voters into backing anti-unionist Ronald Reagan who cheerfully destroyed the right to strike. Now, strike breakers can replace striking workers permanently so no one dares to really strike anymore. Unions have had severely declining membership since Ronald Reagan's rule and now are utterly vanishing as the Old Guard are bought out with bribes and replaced with non-unionized, weaker workers who have far less pricing power and much, much lower wages and virtually no benefits.
Namely, the workers ate inflation. Free trade benefited Asia and Europe. Both saw huge trade surpluses with the US. Both saw their important industries grow massively. Both saw their sovereign wealth increase. Meanwhile, the US had little inflation but rising debts, loss of good industrial jobs, and the de-industrialization of this nation. If WWII were looming, we would have to surrender to Japan since we can't manufacture much of anything to keep ourselves going. We can make weapons but what if we have virtually no steel mills? Most of our ball bearings, fasteners and other vital things are made in Japan, China and Germany! The materials that make the wings of our fancy jets so fancy are made in Japan, not the US.
Friedman encouraged and enabled all this. For years and years, this Zionist who dreams of making Israel super-strong made America super-weak. We have to talk about this business because when we see treason, we have to answer the question, 'Which nation does this guy really work for, anyway?' Suspicions have to be aired. Of course, if anyone does this, they get censored or shoved aside in the US. We are not supposed to ask this vital question. When writers consistently push for things that destroy America, we must explore the question, 'Why?' Some time ago, I showed that Israel, Friedman's home away from home, has enjoyed an international trade surplus. This is due nearly entirely because the US has a huge trade deficit with Israel. On top of paying for Israel's military, all peace initiatives and other hand outs. Israel is by far and away, the #1 recipient of US public largess. Friedman never complains about all this. He is very jolly well overjoyed about this. This is for him, good news, not bad news.
Lehman Brothers' Damocles is an external-crisis measure that looks at ten monthly indicators that are often recognized as possible predictors of external financial crises. The investment bank gives Israel a positive Damocles score of 28, the first time in five years that the country's is positive. Generally, a higher figure implies a higher risk of "external financial crisis".
Lehman Brothers notes that Israel's current account is still in surplus but looks set to move into the red by next year if not earlier. Foreign direct investment flows have slowed compared with last year but the basic balance is still relatively strong. However, the strength of domestic demand is reflected in the ever widening trade deficit that is gradually eroding Israel’s current account surplus. The key risk to the balance of payments is a prolonged and broader weakness in US growth, continued strength of domestic demand given the buoyant labor market and the sharp appreciation of the shekel. The rate differential versus the US has been a key driver of the shekel, so Fed policy in the second half of the year will be crucial for shekel-dollar exchange rate.
As the US dies, the wellspring of free and easy money, easy trade terms that help Israel and harm the US, are in jeopardy. The Jewish bankers in Israel will ask for a favor of their fellow clan members in the US to weaken the shekel so they can undermine US industries further. Since this makes the importation of energy, etc, more expensive, they will probably ask Congress to take care of this detail, too. AIPAC will happily twist arms and pass out bribes to insure this works out. Israel isn't the only nation playing this game. They are just the most blatant and the most occult, being protected by the US media that never, ever discusses all of this. The paper running the above story is from overseas, not the US, just for example. The NYT won't mention this. Nor will Friedman. And both are extremely aware of this business. This isn't due to disinterest or lack of knowledge. This is a conspiracy.
There are a number of leftist web sites that mock Friedman. But none question his patriotism. Or discuss his divided loyalties. But since we see our nation going under due to 'free trade' that is literally eating up our basic infrastructure, society and domestic security, these issues can't be ignored much longer. The longer Friedman gets to play his game whereby he can blow cold on 'free trade' while not mentioning free trade just so he can revert to supporting it later, is a problem for us. He is spread across the nation while people examining his dishonesty are not all over the place. He can lie to his heart's content and no major media will call him on the carpet since most of them are also motivated by treason to ignore important forces destroying America.
This is a problem with all immigrant communities! Germany's rulers tried to appeal to Germans in the US to betray the US and support Germany in WWI and WWII. England did the same! Japan and Russia have done this. They wish to have their 'people' in the US support them in wars that the US gets involved in. The US has to resist this. We didn't enter WWI or WWII immediately due to anger over the idea that people on all sides were eager to exploit us so they could fight wars with each other. This irritation was eliminated in WWII and ever since, we have been at the beck and call of all sorts of minority groups, tribal organizations and religions to intervene and fight physically or to destroy our industries so rival industries in other nations could flourish. We became the all-round sacrificial cow. This is now bankrupting us since we gain nothing from all these battles and alarms. We gain nothing as a nation if we have free trade that runs deep in the red.
At least 29 countries have sharply curbed food exports in recent months, to ensure that their own people have enough to eat, at affordable prices.
“It’s obvious that these export restrictions fuel the fire of price increases,” said Pascal Lamy, the director general of the World Trade Organization. And by increasing perceptions of shortages, the restrictions have led to hoarding around the world, by farmers, traders and consumers.
The Japanese protect their rice industry by making it nearly impossible for imported rice to compete. The European Union severely limits beef and poultry imports, and Poland goes further, barring soybean imports as well.
Negotiators have been working for years to free trade in farm goods, but today’s crisis actually makes that more difficult for them. Food protests in places like Haiti and Indonesia that rely heavily on imported food have convinced many nations that it is more important than ever that they grow, and keep, the food their citizens need.
Everyone else protects MANY of their industries, their food, their water, everything. This MAKES PERFECT SENSE! This is sanity! The US which protects virtually nothing, is not sane. We are chumps. And of course, whenever there is inflation, everyone hoards. This is because what you hold today is cheaper than buying tomorrow when the dollar declines further! Since the dollar is the main currency in world trade, its continuing decline since 1969 is a serious cause of global inflation. And it is declining due to war overspending coupled with a huge, huge trade deficit.
Higher taxes for hedge-fund managers and oil companies will not cover anticipated Obama tax cuts for the poor and middle- class, universal health care and aid to the depressed residential real estate market, said Gross, a long-time Republican.
``This economy will need a jolt of $500 billion or so of government spending real quick,'' Gross, co-chief investment officer of Newport Beach, California-based Pimco, said in an open letter to Obama, the likely Democratic presidential nominee, published on the company's Web site today.
The US economy gets a nice $500+ billion 'jolt' every year. Mr. Gross knows this perfectly well. About $5+ billion of this is a nice jolt for Israel's economy. I suggest all money flowing to Israel be cut. That is a first move in the right direction! Then we cut the future trillions from the occupation of Iraq funds. And then we cut the funds used to patrol Europe, put in missiles there, etc. And ditto, Japan and South Korea. We withdraw our empire to protect our borders which are exposed to alien break ins that are destabilizing our cities. Then we balance our budget and rebuild our industrial base! Wow! Isn't that revolutionary? Will Gross or Friedman exhort their tribal members to support this? I love it when people suggest we cut things for Americans but then disappear when we ask them to fight to cut things going to Israel, for example.
Israel isn't a basket case that needs help! They have surpluses, not deficits! The standard of living for the Jews there is very high! Yet they get the lion's share of US aid and sweetheart contracts and deals that help their own industries before our own industries. And none of the hot shots who talk about cutting money in the US ever mention any of this. Note also that Gross is a Republican supporter who was very involved in creating the fix we are in today. He didn't yell about the Bush tax cuts for the rich. Shame on him. And all who are working in concert with him. He has betrayed America.
(Bloomberg) -- The U.S. won't allow Iran to shut the Strait of Hormuz, through which the bulk of Middle East oil is shipped, a spokesman for the Fifth Fleet said.
``They will not close it,'' Lieutenant Nate Christensen said in a telephone interview today from Bahrain, where the fleet is based. ``The Strait of Hormuz is vital international waters.'' Vice Admiral Kevin Cosgriff, Fifth Fleet commander, made similar remarks to reporters in Bahrain today, Christensen said.
The push for a war with Iran continues and gets worse and worse. The US navy can't keep the Straits open no matter what we do. The very fragile, very flammable tankers won't be sailing merrily about the Persian bathtub the minute bombs begin flying. The US and Israel plot to do a preemptive strike. This is not only illegal and amoral but will drive the cost of oil through the roof. This lie was told only so the US public will sleepwalk into this war. 'Yup, there will be no stopping them thar oil tankers, Martha. The guys who lost the Vietnam War and are losing the Afghan and Iraq wars tell me this!' Indeed, the chances of ANY tankers sailing ANYWHERE is near zero if a war breaks out. The US hopes to neutralize and destroy all of Iran's defenses in a flash and fury. Probably using nuclear bombs. After all, we used illegal phosphorus bombs on Fallujah and not one General nor was Bush hung after trials at the Hague. After all, these guys are protected by the US media that wants these wars. This is why we have seen a semi-anti-war Obama mutate into a 'obliterate them all' clone of Hillary Clinton, a qhoulish morphing if there ever was one.
Michael Gregory, CFA, Senior Economist
During the past several weeks, some of these central banks have grabbed the policy gear shift again, largely in response to the upside inflation risks posed by rising commodity prices. Stoking market speculation of renewed tightening campaigns, policy rate hikes are proliferating among other countries (Chart 2). However, it’s important to keep in mind that the credit squeeze was not a major blow to economic momentum in these other nations. And, for many developing economies, inflation is a more serious problem owing to higher CPI food and energy weights (Chart 3).
Nevertheless, all central bankers share the same concern that rising commodity prices will pump broader price pressures as firms pass on their higher costs and workers demand higher wages to compensate. As such, damping inflation expectations and ensuring some inflation-absorbing slack in the economy are becoming policy priorities.
The G5 are the beating heart of the G# system. They have to perform cardiac surgery on the US to keep the US heart beating even as they artfully work to keep the US from fixing the trade imbalance. They would far rather have the US not spend money on Americans and thus, like Clinton, balance the budget. Under Clinton, our debt ratios got much, much worse. The US consumer and workers went steeply into debt. Under Bush, this was twice as bad. Now, if Obama takes over, these aliens are very anxious to make this infinitely worse. They do not want the trade imbalance fixed. OK: for propaganda reasons, they will allow us to shrink it from $750 billion a year to a mere $550 billion a year. But this fixes nothing! This is fatal for the US. This is BAD. But they won't admit this because they benefit from this.
This chart is full of dangerous goodies. Note the projections! The yen gets really weak, you see! And the US trade deficit shrinks????? HAHAHA. How is that? The yuan gets stronger while the yen gets weaker? HAHAHA. Right! In your dreams! l also highlighted the three quarters the US is supposed to shrink in 2008-2009. Then the GDP goes up nearly 5% in one quarter? HAHAHA. Pray, how? Look at the trade deficits! In the entire year of 2009, they are worse than -$500 billion! Nearly -$600 billion! Which is nearly as bad as this year's projections! And we run a -$613 billion deficit with a recession? Note also how this chart hopes that we have a +3% year by December, 2009. I presume this demented graph is assuming there is no massive war in the middle of the Persian Gulf region.
The main thing is, the trade deficits only shrink a fraction but still continue to rack up trillion dollar losses less than every two years. This is ridiculous and no one should put such a futurist chart forwards with a straight face. Either they issue dire warnings that this is an impossible system that is heading straight off a fiscal cliff or they laugh and say, 'Who cares? We can flee the flaming wreck! Ta-ta!' Note the projections here that the dollar will decline to be worth only half a dollar to the euro. I suppose this is the 'fix' that will allow us to export to Europe. Only Europe won't allow this. Germany didn't mind a strong euro while running record export profits. But if there is any hint of negative numbers, they will move swiftly to dump everything onto the US ledgers again. Everyone does this all the time, after all.
First, the much debated housing bill should be passed immediately by Congress and signed into law.
Second, Congress should move promptly to pass further fiscal measures to respond to our economic difficulties. The economy would be in a far worse state if fiscal stimulus had not come on line two months ago.*snip* Fiscal stimulus measures must be coupled to budget process reform that provides reassurance that, once the crisis passes, the fiscal policy discipline of the 1990s will be re-established.
Third, policymakers need to make a clear commitment to addressing the non-monetary factors causing inflation concerns.*snip* Major importance should be attached to encouraging the reduction or elimination of energy subsidies in the developing world.
Fourth, it needs to be recognised that in the months ahead there is the real possibility that significant financial institutions will encounter not just liquidity but solvency problems as the economy deteriorates and further writedowns prove necessary. *snip* It was fortunate that a natural merger partner was available when Bear Stearns failed – we may not be so lucky next time.
This poorly thought out Financial Times article refuses to examine why we have global inflation, nor does it mention the trade deficit. The focus is on using some sort of halter and whip method to goad the dying horse that draws the US economy along to take some more steps up the economic mountain of ice. Eventually, the horse will fall to the ground and die. But right now, the financiers want it to go...go...and go some more or else. Some sort of goad, some sort of money can be pumped into the economy that will allow us to stumble along with $500+ billion trade deficits as far as the eye can see. They need this to get rich, themselves. This is a fearful situation. They would all dearly love to simply shower even more Funny Money™ on us so we can spend, spend, spend. And send, send, send more money overseas and give, give, give more market share to all our allies who are our dire trade rivals.