It's A Small World After All The Shouting

May 8, 2008

Elaine Meinel Supkis

As the G7 central bankers frantically pump red ink into global monetary systems, they complain about the sudden appearance of 'inflation'. This is like a drunk complaining that the world it tilting. And how will the G7 bankers cure this condition? By getting drunker, of course! They figure, if the status quo of unbalanced trade with the US and easy lending to the same will resume and there will be no inflation in the world if they raise their own rates a tad. But not raise the cost of lending to the US which is going bankrupt. So we have the comical situation of the dollar growing stronger even as the US economy weakens. One thing has improved for us: exports. The world hates this and wish to end it. And the US must remember, we are all trade RIVALS, not buddies. International trade is a dog-eat-dog world, not Disenyland's 'It's a Small World After All' sing fest.

Fed's Hoenig Says `Serious' Inflation Risk May Prompt Rate Hike

``There is a significant risk that higher inflation will become embedded in the economy and require significant monetary policy tightening to reduce it,'' Hoenig said in the prepared text of a speech in Denver. Consumers are gaining an ``inflation psychology to an extent that I have not seen since the 1970s and early 1980s.''

The Federal Reserve must be prepared to quickly raise rates as the economy, now nearing a recession, recovers later this year, Hoenig said. Fed policy makers signaled April 30 they're ready to hold off on further rate cuts as they assess the impact of the 3.25 percentage points of reductions since September. They dropped a reference to ``downside'' risks to growth from the statement that followed their previous meeting.

``A sharp slowdown in growth has put the economy at the brink of a recession while, at the same time, rising commodity prices have caused inflation pressures to rise considerably,'' Hoenig said to the Economic Club of Colorado. He isn't a voting member of the Federal Open Market Committee this year.

Interest rates are low enough that, when combined with tax rebates passed by Congress, the economy should begin to pick up in the second half, Hoenig said.

``The current accommodative stance should be sufficient to cushion the economy from a deeper slowdown,'' he said. ``As the economy recovers and credit conditions improve, however, it will be necessary for the Federal Reserve

So, what is this fabled beast, 'inflation psychology'? I see the Fed officials who create inflation via the wonderful mechanism of super-low interest rates that cause lending to shoot upwards and thus, introduces gazillions of new dollars into the markets which then bid up the value of everything and anything...this is PSYCHOLOGICAL??? HAHAHAHA.

So I will do a seance here and call up Dr. Freud.

Hello, Doctor. How is the Afterlife?
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Der ist no sex. I hate it.
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I fear that sex is part of living, Doctor. I called upon your spirit to ask an important question we humans who are alive need to know the answer: is monetary inflation psychological or is it caused by central bankers flooding the world with easy credit?

Mein Gott! HAHAHA. One thing I have learned in eternity is the entire topic of money is very funny. It brings laughs to both gods and demons. When I came through the Gates of Death, they had a big party. This is because I accurately compared gelt to shit. HAHAHA.

Like you, dear Doctor, I like to use fairy tales and ancient myths to explain how money works. You realize, the new scientific method of talking about psychosis has tossed all your great works out of the window? This way they can ignore the really valuable parts of your work which had to do with talking about lust, wealth, defecation and desire.

Ja, money ist magic. It doesn't exist. It is whatever we want it to be. So, are you telling me that the entire world is suffering a case of Inflationus Extremus? I remember inflation after the Great War. Is someone at war?

Yup. The US is at war and not paying for it with taxes. Anyway, the central bankers think that we are all psychologically creating inflation and if we all clap in unison and say, 'Inflation vanish, presto!' it will be gone. At the same time, they are fearful of a depression and are madly pumping more money into the banking system. Is inflation the fault of psychological problems with all of us or are the bankers bonkers?

You know, the most beautiful goddesses are no fun if you can't sleep with them. This is rather annoying. Oh---your question! Ah, the bankers are always the maddest of all. They get to make money out of thin air. The demons love them. Did you know that all the religions on earth show demons tormenting people by having sex with them?

In reality, the demons don't have sex with us. Otherwise, I would hang out there. Nein, they are all BANKERS. HAHAHA. Well, I must be going.

Thank you for the visit. It is good to know that we, the people of this planet, are not causing inflation by wanting inflation.

And there it is! Why do the central bankers believe this garbage? I constantly see stories like this. During the stagflation years, the central bankers and the ruling elites tried to blame us all for inflation as workers frantically tried to catch up with inflation. Yes, this causes inflation to get worse. But what are they to do? Die?

Indeed, this is the plan: all inflation caused by wars and bankers and misspending by money creators is always to be sopped up by the working classes. In the stagflation years, as struggling workers got raises, this infuriatingly pushed them into higher and higher tax brackets where the government confiscated their pay raises which were mostly inflation-related! So we had a series of tax revolts which changed the psychology of paying taxes to the point that even today, all Presidential candidates who wish to make it to the top of the heap have to all promise tax cuts. And this psychology has degraded the public's attitude about paying taxes to the point that we no longer tax ourselves enough and have run government deficits for every year since the beginning of the stagflation years all the way until today except for two lousy years.

RED INK CAUSES INFLATION. Not psychology. And bankers are the ones giving the cheap loans to the overspending governments and this causes inflation. Not psychology. And the ONLY way to stop inflation is to stop the lending. The bankers know this. And will not say a peep about this. Now, on to 'Free Trade'. This is a goofy concept. There is no 'free trade' there is trade. And if it is in the green, on the plus side, a nation's wealth and power grows. If it is in the red, on the minus side, that nation loses wealth and power. The US is the primary example of this. Our huge trade deficits are the worst in modern history. Our loss of power is equally rapid. We were able to bestride the world only because our top rivals, Russia and China, were ruled by communist dictators who ruined those economies in the past. And Europe was fractured by WWI and WWII.

But now, all has changed. As China and Russia run increasingly in the green with trade surpluses, both are growing more and more powerful. The US is kept alive only because Japan and Europe use us as their military muscle. We are their mercenaries. Both Europe and Japan run trade surpluses with the US. They both desperately want this to continue while at the same time, they will help our central bank flood the world with excess dollars and thus, cause inflation. The entire initiatives of the last half a year have focused on strengthening the dollar and increasing our trade deficits. This is increasingly difficult for them to do. Because the US is literally going bankrupt.

Here is a funny You Tube of Disney's 'Its A Small World After All' exhibit, speeded up to reflect inflationary forces:

Europe and US unite on stronger dollar

The US and Europe now have a united desire to see the dollar strengthen against the euro, senior officials have told the Financial Times.

Policymakers welcome the recent rebound in the dollar, which at one point on Wednesday rallied to a six-week high against the euro. They are concerned that the currency markets have been paying too much attention to short-term economic weakness and market stress in the US, and not enough to the medium-term prospects for the US and Europe, a senior US official said.

I thought our demonic leaders wanted to have a weak dollar so we can export more? Then suddenly, here they are, saying the exact opposite. Of course, our energy sellers who give us our fancy lifestyles want a strong dollar. And to keep the trade deficit under control, we need a strong dollar so we can import endless oil and other energy products. But this makes us go bankrupt! The US, by far, uses the most energy per capita. The way to stop all this is to reduce our per capita use of energy. All other nations we have trade deficits with that are manufacturing powers, all have high energy taxes as well as value-added taxes. The US has low sales taxes as well as comically low energy taxes. As I keep on pointing out, the US is NOT in harmony with other nation's systems.

We have a unique system no one wants to imitate for obvious reasons: it is destroying our industrial base and our economy! Duh! Who else wants to be suicidal? The global elites who set our agenda have decided to lend the US even more easy loans. They figure, we want this, they want to do this so why not? Of course, the result is obvious: the US dies. But since that is in the misty future, no one at the top wants to deal with this unfortunate fact. As usual, all our negotiators, rather than fighting back and resisting this, are egging it on. Note that after half a century of trade negotiations, the US is worse off each cycle. This lunacy is going to continue.

It irritates me to read about these negotiations. There is usually no historical context or discussion as to why our trade negotiators can't do anything right, ever. The basic concept that ALL our allies are RIVALS is part of the problem. A strong Germany or strong Japan do not help us at all if we go bankrupt making both very strong! Duh! Will Japan and Germany fight our wars?

Of course not. They barely lift a finger in our vast wars against Muslims and others who have stuff we want to steal. Recently, Boeing celebrated the great news that Iraq will be buying a whole bunch of jets from them. This is how we ink trade deals! All the Arabs buy Boeing jets from us and we buy oil. And Boeing's contribution towards our trade statistics is very big. It represents one of the few 'big ticket' items we use to balance our trade that is so woefully out of balance in every other regard. My first online stories several years ago were all about Boeing and how our trade negotiators really are Boeing sales staff, not people trying to fix our trade deficits.

EU trade chief hits at Democrat hopefuls

Peter Mandelson, European trade commissioner, has said the protectionist stances taken by the US presidential candidates risk taking the world trading system back by decades.

In an interview with the BBC’s Hardtalk programme to be broadcast on Thursday, Mr Mandelson said: “It is irresponsible to be pretending to people you can erect new protection, new tariff barriers around your economy in this 21st century global age and still succeed in sustaining peoples’ living standards and jobs. It is a mirage and they know it.”

Our trade rivals who are reaming us out are fearful that we might wise up. They will use every means possible to prevent us from doing something smart. Of course, the last thing they want is for us to protect ourselves from their exports to the US! It doesn't matter to them that we rang up over $5 trillion in trade deficits since Nixon! They want this DOUBLED. TRIPLED! To infinity! The trade deficits really took off when the US claimed, we had no inflation. Of course, trade deficits are an expression of inflation! We ground out dollars, claimed we would pay the interest on it and these were shipped overseas and Europe and Asia parked 25% of this into their FOREX reserves. But the other 75% flowed into the monetary systems and is now creating global inflation. Who would have guessed?

IMF's Lipsky Says Inflation Back After Years of `Quiescence'

``This inflation speed-up must be taken seriously as it creates potentially significant challenges to economic stability,'' John Lipsky, the IMF's first deputy managing director, said in the text of a speech in New York today. A return to 1970s-style high inflation and rising price expectations ``cannot be discarded out of hand,'' he said.

While the surge in energy and other commodity prices are the main cause of the danger, low central bank interest rates and a falling dollar are also contributing, Lipsky said. Speaking after the European Central Bank kept its main rate at a six-year high, the official said the inflation outlook ``appropriately is central'' to European policy makers' priorities.

In the U.S., as growth ``recovers,'' consumer-price developments will ``assume greater importance'' for the Federal Reserve, said Lipsky, a former JPMorgan Chase & Co. chief economist who joined the IMF in 2006.

``Low interest rates have a statistically significant impact on commodity prices'' according to preliminary evidence, the IMF official said. ``Exchange-rate shifts also appear to influence commodity prices.''

HAHAHA. The IMF official dared not say outright, 'Low interest rates CAUSES inflation and unbalanced trade CAUSES inflation.' Note how his statement clues us in but doesn't explain anything. He just notes that they are CONNECTED. Not the exact cause and effect. The 'growth' in the US is inflation coming home to roost. The inflation in housing asset values must resume in order to soak up inflation caused by our trade deficits. To do that, they need to drop interest rates to a level that allows US buyers or increasingly, foreigners to buy our housing at super-discounted interest rates. But if this is too obvious, we get raging inflation in the wrong places, in food and fuel.

My old mansion in New Jersey, for example, jumped from $120,000 in 1982 to $2 million last year not because it was more valuable but because the flood of inflationary money flowed into real estate all these years. When that sponge couldn't soak anymore inflation up, it suddenly took off in other areas, first, gold and other commodities and finally, in the worst of all possible places, food and fuel. Notice how the IMF official who was supposed to be aware of and stopping the G7 from doing stupid things, wants these stupid things to get worse. And he also recognized that the G7 policies are creating 'stagflation' like in the 1970's. And he won't do a thing about it. He didn't say, 'The ONLY solution is the Volcker solution.' Indeed, his hope is for them to somehow eliminate inflation so they can continue easy lending to the US.

But one problem here: they can't do it the old way by using cheap Chinese labor! Unless China wants this. Let's look at the evolving news to see where the Dragon is going.

European Retail Sales Drop by Record on Rising Costs

The drop in euro-area retail sales from a year earlier is the largest since the data series began more than a decade ago, the European Union's statistics office in Luxembourg said today. From February, sales declined 0.4 percent. Economists had forecast a 0.7 percent annual decline and a gain of 0.2 percent on the month, according to Bloomberg News surveys.

OK: all last spring and summer, the Europeans were annoyed with China because the euro was strong and Chinese goods flooded into Europe and Britain. The VAT barrier failed because Chinese goods were very much cheaper than European goods. Demands that the yuan rise in value were deafening. The yuan rose in value and the Chinese forced up the yen. Europe was satisfied only this disorganized the flow of money and the system's status quo! The Japanese carry trade vanished right along with the cheap Chinese labor pool effects. Inflation took off and the G7 banking system went sailing right off the cliff. The guys who run this system know that the only way to regain it again is to weaken both the yuan and yen. So, let's see if this is what is happening.

The Yuan Is Falling:

The yuan fell the most this year, paring its gain this year to 4.1 percent on speculation the central bank will slow the pace of appreciation to bolster demand for exports.

Contracts that allow traders to bet on the yuan's value in 12 months weakened by the most since 1999 before a report economists forecast to show export growth declined in April. People's Bank of China Governor Zhou Xiaochuan said May 4 weaker demand for goods sent overseas contributes to slower yuan gains, which has held around 7 per dollar since the start of April.

HAHAHA. See? As I said last month, the old status quo will return by hook or crook. Especially crook. The crooks who run this crooked system have used every power they have to restore it. Only one problem: they can't get rid of inflation! The ONLY way to do this is to rapidly de-industrialize the US as fast as possible so the US must buy all its goods from export nations. I read in the news the other day that a Japanese motorcycle maker is eliminating its factories in the US and will now export only from Japan in order to shore up Japan's industrial base. Since the yen is now rapidly weakening against the dollar alongside the yuan, they must do this. The fiction that Japan would colonize us with their factories and keep us employed will crash if the yen is weak and the profits are greater from exporting to the US. The only fear is, Obama might want to stop this!

China strengthened the yuan and thought the G7 nations would reward China with honor and good deals. Instead, the G7 tried to destroy China by supporting anti-government/anti-Han riots in Tibet and attacking the Chinese Olympics repeatedly. So China will resume playing hard ball. We will regret this. The next time the G7 yell at China to up their currency, they will be deaf to these threats and appeals. They KNOW that the G7 can't get rid of inflation except for China to sop it all up in the world's biggest FOREX reserves and mass of hard working people.

Yuan Drops Most This Year, Forwards Slump, on Exports Concern Toyota's Profit Falls More Than Estimated on Yen

Toyota Motor Corp., the world's second- largest automaker, posted a steeper drop in quarterly profit than analysts estimated and said earnings this year will slump 27 percent on a stronger yen and declining U.S. sales.

Net income fell 28 percent to 316.8 billion yen ($3 billion) in the fiscal fourth quarter ended March from 440 billion yen a year earlier, Toyota said in a statement today. Sales rose 3.8 percent to 6.57 trillion yen. Profit missed the 375.2 billion yen median of six analyst estimates compiled by Bloomberg. The automaker's shares dropped in German trading.

Toyota is furious that the strong yen killed their profit margins. The Nikkei goes up if the yen is weak and down if it is strong. The US should notice this and retaliate. For we are the subject of all this. A strong yen against the dollar is good for the US. A weak yen is bad. It is pretty simple. I don't expect anyone negotiating trade or any US bankers to talk about any of this. I was told to shut up in the past when I raged about this. Most want to focus only on China. But Bloomberg news makes it obvious, there is a very deep Japan/China connection here. And recently we detailed the many diplomatic and banking visits between China and Japan as they worked out SECRET agreements between themselves concerning trade and the value of the dollar in Asia. In other words, Japan is CONSPIRING with CHINA against the US.

We must remember, we are rivals, not allies, in trade. All nations are by definition, rivals when it comes to trade. We might have deals and alliances but we remain rivals. When things get unbalanced, countries must reconsider their alliances. The US certainly must do this if it wishes to survive.

Bernanke Wants Fed to Pay Interest on Bank Reserves

The central bank isn't authorized by Congress to begin making such payments until 2011. Allowing interest on bank reserves may enable the Fed to pump more funds into the banking system without pushing its main policy rate lower, in effect separating action to boost liquidity from monetary policy.

``It would have the effect of putting a floor under the federal funds rate,'' said Walker Todd, a research fellow at the American Institute for Economic Research in Great Barrington, Massachusetts.

Bernanke has expanded the Fed's tools during the credit crisis, rolling out three new facilities aimed at getting funds to the financial system more effectively. The Fed's Board of Governors discussed paying interest on reserves in a closed session on April 30. The Federal Open Market Committee, which includes governors and presidents of the 12 district banks, cut the benchmark federal funds rate to 2 percent the same day.

Banks are required to hold a proportion of customers' deposits in an account at the Federal Reserve. In addition, they hold reserves in excess of their required balances to meet payments.

Because our banking system is insolvent, all sorts of bad things are happening. The instability in the value of the reserves are a reflection of the collapse in the value or certainties of the dollar and our economy due to rampant free trade problems. But instead of fixing the problem, this is yet another attempt at papering over the problems. Instead of saying, 'Gee whiz, the dollar is messed up bad and our reserves are totally messed up, we better figure out how to run a solvent banking system', they say, 'Let's make up more money from thin air.' Basically, this is what they are doing.

On May 2, the federal funds rate ranged from 0.1 percent to 2.5 percent even though the target was 2 percent. On April 23, the rate fell as low as 1 percent and rose as high as 10 percent, compared with the then-target of 2.25 percent.

Under the current statute, the Fed may pay interest ``at a rate or rates not to exceed the general level of short-term interest rates'' starting in October 2011.

The Fed's initiative comes at a time when the central bank is expanding its backstop for financial institutions and taking more credit risk by holding private-industry assets on its balance sheet.
*snip*
The moves by the Board of Governors, on the advice of the New York Fed, have proved controversial with some reserve bank presidents. The central bank's actions ``seem likely to weaken market discipline and extend moral-hazard problems to a much wider financial marketplace,'' Kansas City Federal Reserve Bank President Thomas Hoenig said yesterday.

Good grief. Note how it vacillated between 0.1% to 10%. This is ridiculous, unheard of and an obvious indicator that the fundamental system is unstable and in trouble. And is happening simultaneously with the Fed expanding its activities trying to prop up the insolvent banking system! The 'moral hazard problems' are simple: when a bankrupt is offered endless free loans, they go deeper into debt and spend more wildly. No sane banking system can run on that basis. Yet this is the foolish 'cure' the Fed has cooked up.

Jump in Merrill’s Level III Assets Points to Continued Risk

Merrill is now marking more of their assets Level III, from the Level II, or even Level I, asset pools. If Merrill feels the need to do this, there must be a good reason. The only reason I can think of is that they don’t like the actual market values that must be used on Level I and Level II assets, and would rather just make up the value of their assets.

If the credit markets return to normal, this might be a solid play to regain investor confidence. If the markets don’t return to normal in the next few quarters, Merrill shareholders will be in for a big surprise when their Level III books are accurately valued.

This is not just a Merrill problem, this is an investment bank problem. Goldman Sachs (GS), Morgan Stanley (MS), and Lehman Brothers (LEH) all face similar issues. In fact, Merrill is one of the strongest with regards to Level III assets compared to their tangible equity capital of $78 billion, coming in at around 90%. The others are all above 200%.

HAHAHA. And the bankrupt investment houses are cooking their books, too! And the Fed should stop them, not help them. We had international agreements about Tier I, II and III assets in the Basel Accords. This financial overseeing organization was launched after the Weimar Republic collapse due to hyper-inflation and then hyper-depression. The object was to prevent hyper-inflation and hyper-depression. And one of the goals of this business was to set the value of things held by investment houses which they use as a basis for lending. They can't claim a piece of defecated cow manure is gold. They had to value their stuff accurately in open markets. And they can't do this because recently, all this fake gold turned back into cow patties. So instead of fixing this, the Big Boys are moving rapidly, now 90% [HAHAHA] of their known assets into the Dark Pool [their own name for this place] where they can arbitrarily set the value of these cow patties.

As Dr. Freud surmised, money is shit.

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Comments

[Paul S]

Boeing and GE--two very good examples of what happens to companies after years of being managed by "managers" who are completely devoid of morals or ethics. It was just jaw dropping to me to hear Boeing complain about losing the new Fuel tanker contract to Airbus. For two reasons. One, Boeing hss recently had to pay close to $1 billion in fines for their rigged and phony bidding. Second, their submitted Fuel tanker was near the end of its service life, but they STILL thought they were entitled to the contract! No talk about the wonders of the Free market now. Elaine, I'm curious: What would happen if the US looked out for its best interests and decided to play some hardball with our trade competitors? Say we told Germany, its self defense is now up to them. Likewise with Taiwan--and Japan? What if we told our trade "partners", from now on, we match you import tax for import tax? And we no longer allowed countries like Japan to do things like steel dumping. Of course, Elaine, I'm sure you know as I do why this won't happen. The multinationals have too much power in DC. That just galls me; the corps always scream about their love of free markets, but the TRUTH is, THEY are the biggest govt freeloaders bar none. (You won't hear this on Limbaugh and Hannity, so you'll have to verify from other sources--even though Limbaugh is right 98.9 oercent of the time.) As a side note: an original copy of The Declaration of Independence is currently on display at a local History Center near me. I plan to go view it today. Maybe some of our "leaders" should read it for the first time. It's somehow apropos to read the Dec of Indepence--while in the process of losing our independence.

[Oops]

Elaine.....Don't you think the Fed fears deflation more than inflation? Inflation has been occuring for several years. In spite of this, the Fed has been lowering rates. If they really wanted to deal with inflation they would have been raising rates. I understand that they have made many of the moves to please Wall Street, but at some point they will have to deal with reality. Or maybe not! Do you think they are that far out in "la la" land or they are screwing up out of desperation?

[Elaine Meinel Supkis]

Paul, Rush lies nonstop. He can't see the truth if it hit his pot belly.

Oops: the Fed will, once deflation sets in, support it ruthlessly like Japan has been doing for over a decade. But the beginning of a collapse, they all go for inflation because it keeps politics happy.

Deflation can lead to revolutions. Japan fixed this by haying few babies who can grow up and be rambunctious revolutionaries like they were in the late 1960s.

[blues]

it seems pretty clear to me that the most meaningful definition of the word "inflation" should include the concept that it is comprised of a "basket" of subinflations (and also subdeflations). Here are a few subinflation candidates:

accessory inflation

air travel inflation

blue collar pay inflation

education inflation

energy inflation

finance bond inflation

freight transportation inflation

high pay inflation

industrial materials inflation

low-pay pay inflation

medium pay inflation

military inflation

necessity inflation

personal transportation inflation

precious materials inflation

realty inflation

stock share inflation

ultra-high pay inflation

etc.

You would think that in a real democracy the people would force the politicians to collect and publish these crucial statistics. The very fact that they do not in itself points to the shallowness of our democracy.

I have spent literally years wasting my time on certain big party blogs, and never once have I heard it suggested that politicians should be pushed to collect these statistics.

The next time you go to some large supermarket, take a good look up above. See all those black globes? They are cameras, and their recording every move you make. However, and this has been confirmed to me by people who have attempted it, if you walk in the aisles with a clipboard, security personnel who are watching you with the cameras will swoop down and eject you from the store. Of course, we could pressure our politicians to make it illegal for people who gather price information in stores to be ejected.

But of course, we are preoccupied with so many trivial distractions.

[Elaine Meinel Supkis]

People recording prices can be working for competition. So the stores have the right to eject them. If you want to track inflation, just buy one item over and over again. Select the right 'basket' and track it at home. That is legal.

[Ed-M]

Tn today's Seattle Times website, a story on Japan's disappearing children (because the workers can't afford any):

http://seattletimes.nwsource.com/html/nationworld/2004397071_japanold07.html

[blues]

At the moment, it is legal to eject people who record prices. However, a supermarket is a public place, and it seems clear that laws could be passed to protect people who record prices.

As far as this being used by the "competition," that is merely a theoretical excuse. The "competition" already has this information, probably before the stuff goes on the shelves. Plus, they have the money to investigate prices in many ways, such as the employment of "mystery shoppers."

The cameras everywhere is also an issue for me. The main problem is "information inequity," wherein one class of people knows everything about another class of people, who are allowed to know nothing. Society gets divided into two parts, the watchers and the watched. Such a society cannot be democratic.

Another thing I have read about supermarkets is that they make a very, very tiny profit as individual entities. Their wholesalers make huge, huge profits. So the wholesalers control the entire operation. You know how complicated corporate relationships can be...

[PLovering]

GE or Boeing managers are not at fault. Politicians are in defense contracts up to their eyeballs. Recently, a Boeing manager in Seattle proclaimed that he intended to build a new plane with the help of mostly local contractors. He was promptly fired.

Our prime contractors are forced to deal with subcontractors all over the globe, and some of these subs are less than savory. For instance, when one Euro sub couldn't deliver acceptable parts and the prime wanted his own tooling back, the sub demanded, and got, a huge fee to release the tooling.

As economist Thorstein Veblen said, the profit is in the chaos.

[Paul S]

Elaine: I was being as sarcastic with my remark about Limbaugh. It makes me grind my teeth when I hear a callerr to Limbaugh say,"mega diitos, Rush". Limbaugh is a clown; a sick joke. Limbaugh is for the 'little guy' the way the oil companies are against profits. And don't get me started on Hannity. He's worse IMHO than Limbaugh. I just love the buzzwords talk fascists like Hannity use. "You're a great American..." Or how about this one? "I was talking with my good friends at the American Enterprise Institute... Great Patriots who love their country..." Well gee, Sean, so if anybody disagrees with you they must HATE America and they aren't patriotic? I could go on about how disgusting these guys, Limbaugh, Hannity and their ilk are, but I'll stop now. I call them shock jocks. They NEVER cease to amaze me with their outrageous and false statements. And you are right Elaine. They are terrible debaters. If a caller nails them the caller gets cut off. I should stop listening to these idiots, but they must be my favorite thing to hate. Sort of like gawking at an accident. PLovering: Your remarks are well taken; I'm sure goverment is a big part of the problem as well. In fact, a director for procurement with the Defense Dept went to prison for her involvement in bid-rigging. And anyone who has had to meet government compliance knows how difficult that can be.

[Elaine Meinel Supkis]

My HUGE apologies to you, Paul! Heh. You should put a 'HAHAHA' next to such things in the future. I do this all the time because plain snark is hard to tell sometimes. Or put in a :) or something. I really wish we could use those various face icons here. I loved using them in the past.

Plovering: the Boeing contracts are all about diplomacy and wheeling dealing. Europe pulled some serious stuff to get the billions and billions in defense contracts for the mid-air fueling contract. It was pure politics. Nothing to do with corruption, etc.

Again: we Americans are PAYING FOR THIS STUFF. Europe is COLLECTING DEBTS WE MUST PAY to build this stuff. Eh? Out of my pocket and my kid's pockets. So I have very strong feelings about this. The ONLY industry we have left is the military and Boeing stuff.

[GK]

Boeing airplanes purchases are merely diplomatic tokens because they are so visible to the public.

And Yes, they are one of our last remaining industry (if you can call final assembly of parts made mostly overseas 'industry') and that is why one of the high probability for targets is Seattle.

http://www.defensetech.org/archives/000410.html

You could dress up in an Iranian flag, rent a Ryder truck with an Iranian credit card (do they even have them? Who cares!) and Pow!

We have President McCain or King Cheney and we are off to NUKE Iran. Wahoo!! :-O

All we need is a small command and control center in the middle east to run our new empire. Any suggestions?

[Elaine Meinel Supkis]

There are plenty of Iranians in the US who can do this. Motivation is the problem. Like the Cubans in America, the Iranians want to go home, not have it glassed over.

But Israel would love to see Iran eliminated along with most every Muslim nation. They can and have massacred Americans in the past and then used traitorous American agents who support Israel before the US, to cover it up. Like in the USS Liberty sinking/mass murder.

[Paul S]

You're a great American Elaine!!HAHA. I'm going to steal that line from Hannity. He has HIS definition; I've got mine. Now I am NOT being sarcastic when I call you a great American. I just want to neuter Hannity.

[Elaine Meinel Supkis]

Arrange a Freudian slip for him....

[calvino]

The USS Liberty, a communications and reconnaissance specialist was targeting Israeli nuclear launchers and air control command, in the middle of a three front war against Iraq, Jordan, Syria, and Egypt. You are a scion of the intelligence community, none of this is news. Do you think we would have acted differently if one of our 'allies' parked a ship 13 miles off San Diego, which is international waters, while the Chinese had landed in San Francisco and Seattle?.. To extend the analogy, the same ally had prevented us from sacking Beijing eleven years before, presenting us a future full of existential angst? There are no allies in fights for survival and only an idiot renders survival to the mercies of anyone. You do not really think the Israelis are idiots, do you? The falsehood is the fictional cosseted relationship that Israel is supposed to have with us.

[Anthony]

Oil hits $125 today. I am telling ya, it's the Saudi saying to Bush, give Palestinian independence, or we'll keep squeezing oil price up till you drop.

Bush thinks he can win the blinking game.

Second wave of big financial panic is about to set it. Just watch, as price of oil climbs passing $130.

http://www.financialsense.com/Market/wrapup.htm

G-7 Central Bankers Stymied by "Crude Oil Vigilantes"

[Elaine Meinel Supkis]

Um, Calvino, are you nuts? #1: the US ship was monitoring the war. #2: the US was an ALLY WITH ISRAEL, not at war nor a hostile enemy. #3: the Israelis lied about bombing and strafing the ship. #4: the Israeli lobby twisted arms so that all this was swept under the rug after McCain's father 'investigated' this. #5: the Israelis lied and said they thought it was a Russian ship, not American. The huge American flag we see in the photos from that day belie this story. #6: the US media refused to cover this story, never mentions this story and has done exactly NO investigations of this story. #6: the US Congress refuses to do an investigation despite heavy lobbying by the survivors of this malicious attack. Had enough?

[Elaine Meinel Supkis]

About the present rise in oil: the media absolutely refuses to make the connection of US wars=high inflation/high fuel prices. Neither do any candidates for President or any of the political parties except the 'fringe' parties. This is the biggest, stupidest and most dangerous 'Cone of Silence' ever!

It can cause WWIII when combined with the desire of the Zionists to get all Jews parked in Ground Zero of the Holy Land and the Christian's dream of having most of humanity killed by a bloody Jesus who is probably a demon, in the Apocalypse.

[calvino]

To your point that Israel was an ally - indeed. Allies do not park in international waters and jam their ally's communications. The same ally prevented Israel from eliminating its very hostile enemy in Egypt in 56. This was against the policy of France and England, whose forces were participating. That would make Israel question the depth of our commitment. Do you intend to shock me with the big flag? I know, you know, everyone knows that it was an intentional attack. Why attack a weak excuse when you know what it is. If we maintain the fiction that Israel is our favorite pet, then Israel must maintain the fiction that they did not take out our spy ship. The Chinese rammed our surveillance plane while they were at peace, not under mortal threat. Yet we approved their most favored nation status the same year.

[Paul S]

I think oil is reaching $125/bbl because of the declining dollar, increased demand from countries like China and India and stable oil production. I think the Saudis are in too deep with the 'House' of Bush. Like others have said here, WE keep the Saudi Royal family safe from their own people. Why are the Saudis behaving as they are? Because they can and as long as the Iraq war is going on, there's nothing to stop the Saudis. Note how the price per barrel of oil beofre the Iraq invasion was $29/barrel? Maybe we can pull out Bush's "Mission Accomplished" banner :). As for the USS Liberty: my understanding is that this ship was transmitting information on Israeli military activities to Egypt and other Israeli enemies. So the US so to speak got their hands caught in the cookie jar. Which is why the US ALSO swept this incident under the rug. I know about AIPAC, but I just can't believe that in 1973, Israel had enough influence to sweep this tragedy under the rug all on its own. The US had an interest in sweeping this under the rug as well--which is what they did.

[Elaine Meinel Supkis]

Calvino, China is not nor ever was, an ALLY. Can you understand the difference between 'trading partner' and 'military ally'? Talk about nasty allies! If you reflect the official position held in Israel, I say, cut all military supplies and support of Israel.

Gads.

Paul: You are 100% correct all over, thank you! And yes, the US government did sweep this under the rug except Israel's Jewish supporters had tons of influence back during that time: THE MEDIA.

The verboten topic in America is, what religion do our media owners adhere to, what ethnic group are they.

[calvino]

Israel is our sicking dog in the Middle East. Take out Israel, Syria goes back into Lebanon, Egypt starts acting as a regional power, Jordan falls, the Saudi Arabs cut ties to our military conglomerates and act independently, Iran expands influence and Russia and Turkey expand influence. You know this. Israel is an best friend because it fits the maudlin strings that our State Dept needs to play when carrying out realpolitik. China is not a trading partner, but a burgeoning colonizer with a huge surplus population.

[calvino]

I have said this before, the AmericanJews are step and fetchers unwittingly carrying out policy that is deleterious to themselves.

[Paul S]

We won't cut our military ties with Israel. They are or were a good testing ground for our military hardware: what improvements need to be made, how well they perform vis a vis Soviets weaponry. AND: the US needs Israel for intel on the ME region. Also: the US govt doesn't speak with one voice. Example: we give Israel military aid and the like, but we also cozy up to the Saudis. That makes it harder to gauge what the US is really thinking. When Israel bombed the Iraqi nuclear facilities in Osirak(sp.?), some supported Israel's move and some notables did not, such as G.H.W. Bush and the slick and slimy James BakerIII. Amazing thing about Baker: he lost every campaign he managed, but still managed to stick around with the Bushes in power. Aw, go ahead. Make 'em Secretary of State. I'll bet they just loved him at State.

[Elaine Meinel Supkis]

The Saudis know this. And they have a WMD: cutting off our oil. So we are torn in two. We are forced to support Israel but we NEED Saudi Arabia, not Israel.