This is the Chinese 'Year of the Pig' and we have some really nasty porkers out there. After posting yesterday's story about the yen/yuan/dollar fake currency game, along comes more interesting news illustrating what I was talking about.
By DIKKY SINN, Associated Press Writer 41 minutes ago
HONG KONG - Sunday marks the start of the Chinese New Year and it's a lucky one for those starting out in life. But the rest of us are in for a rough ride. Expect epidemics, disasters and violence in much of the world.
"The Year of the Pig will not be very peaceful," said Hong Kong feng shui master Raymond Lo.
Well, last year wasn't so peaceful, either. But maybe it will 'peaceful' in retrospect. The USA is determined to follow this present path to the bitter end and the economics of the present system will cause an eruption in violence as the world's most expensive military empire implodes if it tries to create even more wars.
By Michael Harrison, Business Editor
Published: 16 February 2007
Tomkins, the car components to building products group, warned yesterday that the slowdown in the US housing and automotive markets coupled with the weakness of the dollar would hit profits for the first half of this year.
The warning came as the group announced a 7 per cent fall in pre-tax profits last year to £245m and said it planned to sell off three American businesses with combined sales of £500m. Tomkins also said it would cut capital expenditure and transfer more production to low labour cost countries such as Mexico, China and the Czech Republic.
Tomkins shares fell by almost 3 per cent as analysts cut their earnings forecasts. David Newlands, the Tomkins chairman, said: "The overall outlook for our markets in 2007 is difficult particularly when compared to the first half of 2006. This, together with the weaker US dollar, is expected to impact the comparison with the prior year."
The US accounts for more than 70 per cent of Tomkins' sales and profits.
The Europeans are in a quandry: they need to weaken their own currencies in order to sell to the increasingly poor USA but they can't do this without creating either huge bubbles at home due to interest rates below the real rate of inflation or by creating an artificial depression like Japan's rulers did to their own people.
England, as part of our defacto empire, is particularily vulnerable to swings in currency values. They insist on having their own currency despite losing most of their sovereignty to either Germany or the USA. Indeed, the whole ongoing debate in England over their status vis a vis Germany and the USA hinges on the recognition that England is no longer an empire and is indeed, a province of other larger imperial comglamorations.
The problem with hitching themselves to the USA is the looming financial disaster that will befall the American imperial rule when the Chinese inevitably pull out the rug from under us and take over. The British, as my blog has shown in the past, have been virtually begging the Chinese to take over their manufacturing situation but to not ship it off to China, they hope to beggar the British worker to the point they will be on the level of Chinese workers and this means depressing prices greatly so the workers will be content to live on very little.
Of course, this system relies on rich American workers paying high import prices for goods and thus sending their wealth to other nations. We have been doing this for a long time but the same grinding process of beggaring the workers is now in full force here. We must not be fooled by Congress raising the minimum wage many years after it has lost 50% of its buying power. The problem is at the top end of the scale: auto workers, for example, are being hammered into handing back wage winnings and medical care.
By Jane Padgham
Published: 16 February 2007
"We should recognise the true meaning of the Christmas story will not be revealed until Easter, or possibly later," Mervyn King, the Governor of the Bank of England, famously once said, referring to the unreliability of retail sales data over the festive season. Never has that warning looked more apposite than after the release of yesterday's official figures for January.
The figures, from the Office for National Statistics, showed retail sales plummeted by 1.8 per cent last month, despite deep discounting in the New Year sales. The drop was the biggest for four years and dragged the year-on-year rate of increase down from 4 to 3.3 per cent.
With the exception of internet retailers such as Amazon, which enjoyed another month of sparkling sales, weakness was seen across the board.
The solution the government will have is to bring in cheaper foreign goods. This means strengthening the pound so the pound's value vis a vis the yen and yuan will be artifically high. Then merchants will be able to sell more stuff to poorer workers in England.
I remember when England used to have high tariffs and barriers. They didn't want cheaper German goods flowing back into their country. But they didn't want workers at home making much money, either. So the workers were kept in severe poverty and thus the capitalists could make a profit off of their sweat and blood but the Germans, who developed a socialistic system under the conservative, Bismark, of all people, was beating them because healthy, well-educated workers are more productive than sick, weak, threadbare workers.
The Asian model we see today is based on having workers save lots of money. This scheme works for only about two, maybe three generations before frustrations over saving at 0% boil over into attempts at making money some other way and of course, this is already causing stocks here in the USA to shoot up, not just Americans are buying stocks, this is global: everyone wants to be part of a rising stock market since secure savings are a cheat nearly universally.
By Jane Padgham
Published: 16 February 2007
Japan's consumers are finally bouncing back after years in the doldrums, government figures showed yesterday.
The world's second biggest economy expanded at an annual rate of 4.8 per cent in the fourth quarter of last year, bolstering expectations that the Bank of Japan will lift interest rates at its meeting next week.
It was the eighth successive quarter of growth - and the fastest pace for nearly three years - reinforcing views that the country is on a solid recovery path. The news propelled the yen to its strongest against the dollar for over a month.
Consumer spending, which accounts for more than 50 per cent of total economic activity, led the way as the Japanese splashed out on travel, flat-screen televisions and mobile phones after years of austerity. Cheaper heating oil and a mild winter freed up money for spending, the government said.
Not only is tiny Japan the number 2 economy, this is so silly---their 'economy' shoots up more and more, year after year, spending at home is flat. They admit they are starving the buying ability of workers there, the 0% interest loans are NOT OFFERED TO THEM! Nope. This is strictly for the rich corporations that export to the USA. And the need to have low interest loans is part of the scheme to keep America buying, keep the yen spectacularily weak---how bizarre is it?
The world's #2 economy has the weakest currency? Not only that, depressing the value of the yen caused a depression at home even as Japan is one of the few major manufacturing nations on earth running a trade SURPLUS with the world? HUH? The lunacy of this is obvious!
The Japanese people are 'travelling' not to see the sights but to go shopping! The value of the dollar has finally dropped enough that the cheap yen is no longer a problem for them since we are witnessing a repeat of what happened in the 1980's: goods made in Japan are cheaper in the USA than in Japan.
The gastly news that America's trade imbalance with virtually the entire planet should be a flashing red light to us that our situation is intolerable. Now that everyone is pursuing the Japanese trade policies, this has upended world trade and it is now so obviously out of control, it is like all balloons, about to pop.
The American housing balloon was the latest attempt at jiggering spending here so we could consume all the world's goods without selling much of anything expect paper IOUs.
Consumer spending has been astonishingly weak, despite the fact that Japanese businesses have been quite profitable. However, they have ploughed this money into investment, rather than paying their workers more.
And here is the truth! For once! I can't believe my eyes. Will this reporter keep her job? Will she be blacklisted now? The 'investments' are either going into building factories in China which undercut wages in Japan or they go towards playing money games in the USA to keep this shell game running a tad longer.
And that, in a nut shell, is the Japanese economic 'miracle.'
The fact that the world's supposedly #1 economy features the government, trade and personal savings all running deep in the red and the world's #2 economy has a huge trade surplus with the world and high personal savings while offering near 0% interest savings rate means something very sick is going on here. The refusal of any of the leaders in our government or top economic leaders like Bernanke to address this bizarre, totally insane duality, is due entirely to political games featuring the handing out of many bribes and stipends designed to corrupt people who are supposed to be protecting the American and Japanese people.