October 20, 2008
Elaine Meinel Supkis
As the US tumbles into a bad, bad recession, we are having an election. And there is virtually no discussion about what is really wrong. Indeed, the main focus in this election isn't war or our trade deficit or yawning budget deficit, it is nearly all about race. To the fury of many who want otherwise. But then, from day one in the US, it has been all about race and slavery which were embedded within our Constitution and excised very painfully and often, extremely violently. I will discuss this history later. First, the economic news. After central banks nationalized the G7 banking systems, they managed to sort of restart the old status quo. This is bad.
US industrial production plunged a shock 2.8 percent in September, the steepest fall in 34 years, due to hurricanes in the Gulf of Mexico and a strike at Boeing, the Federal Reserve said Thursday.
Hurricanes Gustav and Ike, which hammered the Gulf of Mexico region, a key hub of the US oil and gas industries, and a machinists strike at Boeing that has crippled civilian aircraft production, "severely curtailed output," the central bank said.
The plunge in output far exceeded analysts' consensus forecast of a scant 0.8 percent decline. It was the strongest fall since December 1974.
All summer, the media and our ruling elites trumpeted the great, great news that the trade deficit was declining. It will, of course, continue to decline as the price of oil temporarily retreats. This is because over one third of our trade deficit is energy-related. Also, as people lost their incomes for buying stuff, they bought less manufactured goods as well as energy goods so that causes the deficit to decline. Throughout the last 35 years, the only times our trade deficit declines is during bad recessions.
So it is NOT a sign that we are expanding our international markets. It is more a reduction in US consumer spending. So last summer, we had all this chatter about how our exports have increased. On the other hand, as I expected, we see this fall that industrial production has collapsed! Since the very beginning at Culture of Life News, I have said that Boeing is our major and, aside from other weapons systems, nearly only major industrial export power. The US Presidents spend a lot of time, selling Boeing jets ever since Nixon went to Japan and Boeing got all entangled in bribery of Japanese Prime Ministers afterwards.
The Boeing strike ruins our trade statistics. Since our trade partners have to buy SOMETHING from us, they usually opt to have their governments buy these jets because this doesn't open up their own domestic markets to other US manufactured goods used by ordinary consumers. Recently, Japan chased out a Korean domestic goods manufacturer who has a huge market share in China and the US but ZERO in Japan. But Japan buys lots and lots of Boeing jets. And is gradually prying off of Boeing, significant sections of that company's manufacturing process so that these export numbers are really not real.
They do NOT take into account that the finished jets sold to Japan are partially made in Japan and then shipped to the US for final assembly. This inability to look closely at or understand the dynamics of 'free trade' lies at the very heart of the US banking and industrial collapse. We know that, if free trade is kept in place during this bad, bad recession, when the recession is done, US manufacturing will be a good 10% or more, smaller than before this recession. And since over half of US manufacturing is military, if we stop our endless wars and raising the Pentagon budget by 6% or more a year, that will collapse, too.
But this military budget is a huge burden on US taxpayers and is bankrupting our nation. And exporting all this stuff is not going to fix things since this merely puts off the day when we can't afford to do this any more than Russia could when they went bankrupt. I remember when we could buy all sorts of nifty Russian military stuff like night scopes for very little. We bought a number of Russian military goods during that time including the very warm hats! I kind of miss that now.
But Russia knows that they have to manufacture other things and are slowly changing gears. Also, they have revived their military markets and are selling briskly to people we don't like very much. And are renewing their rocket technology, they fired off more experimental missiles in the Pacific this month and are not only making deals with countries we hope to intimidate but are the ONLY way we and Europe can access that space station! Now, who won the space race? Remember: races don't end when we get to the moon.
(CNN) -- Sen. John McCain stepped up his rhetoric against his Democratic rival on taxes in his weekly radio address Saturday, comparing his plan to "socialist" programs. The remarks were part of a theme McCain has used since the final presidential debate, but his most recent comments were the first time he used the word to describe Sen. Barack Obama.
In the radio address, McCain didn't directly call Obama a socialist, but he let the now-famous Joe "the Plumber" Wurzelbacher nearly do it for him.
"You see, [Obama] believes in redistributing wealth, not in policies that help us all make more of it. Joe, in his plainspoken way, said this sounded a lot like socialism," McCain said Saturday.
I am a pro-socialist who is also a pro-traditional banking and pro-civilization person. I love the opera, love ballet, love fine arts, good wines and other good things. I also like fighting, shooting, hunting and other things which incidentally, were also enjoyed by the ruling elites in the past. I support traditional banking simply because it worked in the past. When it didn't work was always connected with wars so I assume that wars are bad for good banking. Period. So wars should be avoided and taken on only very reluctantly which is why our Founding Fathers did NOT want a standing army.
The stupid 'Joe the White Skin Head Plumber' business is typical of this election. The guy used to belong to a racist party. He has been arrears in his taxes. He hates 'socialism' and you can bet, he will be screaming for socialism when he becomes old if he can survive that long. There is this very significant number of white racists who love to have 'socialism' but hate SHARING it with others. So they have chosen to hate all socialist systems for the time being. Social systems of ANY sort feature taxes. From the dawn of civilization, the one thing that all civilizations have in common is the concept of taxes and the concept of the government protecting the people during bad times.
If a ruler didn't protect the people in bad times, he or she would fail. Either invaders would destroy the kingdom or there would be uprisings and palace coups. This is why all smart rulers don't crush the workers entirely or let them die if there is a food shortage. This is why smart rulers fear food inflation. This can cause French Revolutions, just for one glaring example. Why so many working class Americans hate 'socialism' annoys me. For it is not sane.
Japan had a very extensive social safety net and a lot of socialism in the past. But then, they have a mono-tone society. But lately, the ruling elites have experimented with ripping up this safety net and at last, the people on the street are beginning to show some signs of unrest. So I expect the LDP to repair this broken net, fast. Our other trade rival, Germany, is very socialist and has high taxes. They have a decent trade surplus with the US and others, too.
China does NOT want to be the US at all. They look at us as a goose to be butchered in the end. If you ask any Chinese what system they want, most would say, 'Germany', not 'the USA.' All sophisticated civilizations that wish to be the top export producers and top social leaders on earth are at least half-socialist societies. The US is seen nearly universally as CHUMPS not CHAMPS. When the traditionalist, Bismark of Germany, understood the utility of socialism, he aggressively embraced it and Germany had Social Security 100 years before the US got it! And instantly, Germany became one of the greatest powers on earth, and this was directly connected to Bismark's reforms.
Indeed, Goldman’s presence in the department and around the federal response to the financial crisis is so ubiquitous that other bankers and competitors have given the star-studded firm a new nickname: Government Sachs.
The power and influence that Goldman wields at the nexus of politics and finance is no accident. Long regarded as the savviest and most admired firm among the ranks — now decimated — of Wall Street investment banks, it has a history and culture of encouraging its partners to take leadership roles in public service.
It is a widely held view within the bank that no matter how much money you pile up, you are not a true Goldman star until you make your mark in the political sphere. While Goldman sees this as little more than giving back to the financial world, outside executives and analysts wonder about potential conflicts of interest presented by the firm’s unique perch.
“There is no conspiracy,” said Donald C. Langevoort, a law professor at Georgetown University. “Clearly if time were not a problem, you would have a committee of independent people vetting all of the potential conflicts, responding to questions whether someone ought to be involved with a particular aspect or project or not because of relationships with a former firm — but those things do take time and can’t be imposed in an emergency situation.”
In fact, Goldman’s admirers say, the firm’s ranks should be praised, not criticized, for taking a leadership role in the crisis.
“There are people at Goldman Sachs making no money, living at hotels, trying to save the financial world,” said Jes Staley, the head of JPMorgan Chase’s asset management division. “To indict Goldman Sachs for the people helping out Washington is wrong.”
Goldman Sachs gnomes are 'leading' us to the slaughter. They have destroyed America. All the choices they have made are wrong. We are in the present mess thanks to them! How can anyone sane praise this utter take-over of our Treasury, the Federal Reserve, Congress and many state houses as a good thing? We are way, way down the wrong road and we are there thanks to them! Goldman Sachs should be investigated and the people who are 'serving' us this stew of destruction, they should be arrested for treason.
Treason is NOT offering simple socialist programs like the ones Germany has had since 1860. Treason is free trade which has driven the US into deep debt and destroyed nearly all of our own industrial base. Treason is destroying our entire banking system to a degree not seen since the Great Depression. Treason is trying to restart this very bad status quo. I am glad the NYT is finally telling us about these stupid ruling elites from Goldman Sachs. But note that they confuse readers by praising these clowns!
And that law professor: who says we don't have time to discover exactly how connected the guys 'rescuing' us are to the guys who created this problem in the first place? In my mind, NO rescue is possible without first finding out WHO SCREWED UP. And then punishing them. We don't wait to see if these very same criminals can save us, first! If we want this done in a hurry, I think it can be done in less than one week. When I went to Congress, there was some rather frightened talk about the possibility that Americans might put 2+2 together and attack Goldman Sachs but that has faded. Now, with the media telling us these pirates are rescuers, all is well. The status quo will continue for a while longer.
Pay and bonus deals equivalent to 10% of US government bail-out package
Staff at six banks including Goldman Sachs and Citigroup are in line to pick up the payouts despite being the beneficiaries of a $700bn bail-out from the US government that has already prompted criticism. The government's cash has been poured in on the condition that excessive executive pay would be curbed.
Pay plans for bankers have been disclosed in recent corporate statements. Pressure on the US firms to review preparations for annual bonuses increased yesterday when Germany's Deutsche Bank said many of its leading traders would join Josef Ackermann, its chief executive, in waiving millions of euros in annual payouts.
Goldman Sachs rewarded themselves. So did the JP Morgan pirate community. The gnomes knew they could skim off 10% and hoped to get away with it. It was NOT headline news in the US media until the Brits broke the story. Thanks to the Guardian, most Americans now know the ruling elites used this damned rescue to reward themselves. This last week, the AIG gang went off to Scotland on a multi-million dollar jaunt to shoot grouse and grouse about the peons interfering with their fun. They drank expensive brews and brooded about the unfairness of life. Why, we are criticizing their efforts to cultivate contacts via these wonderful parties where they fly about the planet in their private jets!
This, too, was in the British news, not American news. US newspapers don't send reporters snooping around Bilderberger gatherings or if ABC sent a reporter to check out who was at the Democratic party's corporate parties held by the super-rich, the reporter is beaten up by the cops. At the Republican party, the media didn't even try to do this. Any reporters reporting on the demonstrations was beaten up or arrested, too. So this guarantees the media won't look at anything, anymore. And they don't look much at all. But the news that AIG got tens of billions from US taxpayers and then went off to have expensive parties has leaked out via the internet. Joe the dumb Plumber doesn't talk about this. He hates worker's socialism, not corporate socialism.
(Bloomberg) -- The U.S. Treasury's pledge to inject $250 billion into banks may coax private-equity leaders Stephen Schwarzman, David Rubenstein and Henry Kravis to resume investing after more than a year spent mostly on the sidelines.
The founders of Blackstone Group LP, Carlyle Group and KKR & Co. LP told investors in Dubai this week that the biggest government intervention in the financial system since the 1930s will help attract private capital to lenders. The U.S. plan, following similar steps by Britain and other nations, may lead to investments of tens of millions dollars, not the $20 billion- plus deals that capped the leveraged-buyout boom of 2006-2007, they said.
``There's a crying need for capital, and now there's a chance that the government will invest alongside,'' said Rubenstein, the 59-year-old co-founder of Washington-based Carlyle, whose $80 billion in assets rank it second in the buyout industry after Blackstone and ahead of KKR.
Participants described a buyout world that differs markedly from its peak, when debt-laden deals such as the $43 billion acquisition of power producer TXU Corp. and the $26 billion takeover of Hilton Hotels Corp. brought the once quiet industry into the public spotlight. There have been $194 billion in announced buyouts this year, a decline of 70 percent from the same period in 2007, according to data compiled by Bloomberg.
Hooray for socialist spending on pirates and gnomes! Isn't this damn cute? At the very least, one would hope that the GOP working class supporters would figure this simple math out: They PAY $trillions of dollars to bail out and fund corporate banking criminals who plan to CUT social security to the workers supporting them via future tax burdens. On top of this, these cheeky chaps are telling Mr. and Mrs. Joe Plumber that due to this future tax burden, why, THEY must lose social security! HAHAHA.
The only reason I see so many white working class people supporting this insanity is pure racism. I can't fathom any other reason as to why American workers, unlike workers in nearly all other sane nations, are slitting their own throats.
Here is a close-up look of the critical period from July 17, 2007, when the Japanese carry trade began to seriously unwind, to the end of September when the derivatives risk swaps collapsed in chaos started the present stampede to the Federal Reserve to get 'capitalization':
All past banking crisis eras, we never, never saw this level of bank borrowing from the Federal Reserve. Never. Even the 9/11 savings was only $12 billion and was considered to be a huge, huge intervention. Since then, as Goldman Sachs took over even more parts of our government, we are now enmeshed in a situation where the amount is rapidly heading towards a trillion dollars! Instead of discussing this, again, our media and the politicians won't talk about this at all.
Ron Paul and Kucinich are the exceptions and they seldom are in the mainstream news. Now, I know that many Ron Paul supporters are angry with me because I am mad at Paul for hanging out with a very, very racist Republican Party. I warned him, he should cut his ties if he is sincere about what he thinks and says. But he will NOT. Not even after, in Texas, his own supporters were locked out of the GOP convention! So I am assuming he values something in the GOP and that something is rather ugly. No revolution can happen without embracing the slogan, 'EQUALITY, Fraternity and Country!' Germany's fling with inequality under the National Socialists was a total failure which led Germany into nearly total destruction and the dismemberment of the entire nation.
(AP) — The idea is ambitious: World leaders joined by aides to the new U.S. president-elect would gather before the year's end in New York and attempt to forge a new vision for the global economy.
French President Nicolas Sarkozy has teamed up with British Prime Minister Gordon Brown to press for such a summit, and the French leader travels to Camp David this weekend to lobby President Bush to sign on.
Brown, buoyed by the praise he won for engineering a British bank bailout that inspired U.S. and European rescues, is proposing "radical changes" to the global capitalist system, including a cross-border mechanism to monitor the world's 30 biggest financial institutions. Sarkozy has floated the idea of reforming rating agencies and even exploring the future of currency systems.
Details remain vague and the obstacles are many.
Behind the lofty rhetoric, Brown and Sarkozy are backed by a degree of clout.
They have proved instrumental in the past two weeks in corralling European governments to dig deep into taxpayers' pockets to shore up banks, unfreeze credit, and soothe markets.
Charming duo. They persuaded Europe to burden the taxpayers to sustain the crummy banking system? HAHAHA. The market Europe wishes to soothe it the unbalanced global trade markets. They need to keep it out of balance and to do this, they have to prop up the present banking system. But they are aware that this is now impossible under the dying dollar regime so they want another Bretton Woods so they can figure out some clever solution. Even desperate enough to talk openly about returning to the gold peg! Only no one can do this and have infinite growth!
The desire for infinite growth has not died at all. Everyone wants this because it is immense fun. This is why I talk about the real roots of all wealth and how the invisible beings who control this system operate. It isn't a joke or an attempt at being childish. It is the harsh truth. The only way global trade has any stability is when an empire can compel some sort of system and using military as well as economic powers, enforce their rules on everyone.
This is what is failing today. Asia and Europe are NOT on the same page here. Europe wants the US to be stronger and stronger, militarily, so it can defend Europe's market shares including the very important shares with the US. All of Europe runs trade surpluses with the US. They intend to keep this no matter what! Asia is the same except China does NOT want US military power in Asia. So this is a very significant split. When world economic leaders meet to hash out how to keep the status quo going, China's only interest is to insure that this status quo continues to bleed the US dry. Europe wants to prop up the US, China wants the US to go bankrupt.
Since Europe still will not spend much money on defending themselves and since Japan cannot defend itself due to its size and declining young population, if the US goes bankrupt, Europe will be totally exposed to Russian domination and Asia will be dominated by China. Both Russia and China know this which is why they support Europe's bail out plans for the US. They hope dearly that Europe will go very deep into debt to bail out this system. And burden the taxpayers there with supporting a collapsing capitalist system. While still trying to be socialist, incidentally. All of Europe absolutely adores socialism.
The Monetary Policy Committee last week unexpectedly cut rates by a half percentage point to 4.5pc in the face of the financial crisis. However, there is also growing evidence that inflation, which has risen above 5pc in recent months, is set for a dramatic fall. The Retail Price Index – the most comprehensive measure of UK high street prices, will drop at an almost unprecedented rate to -2pc by the second half of next year, according to new research from Fathom Consulting.
It said the fall was largely due to the drop in mortgage costs and house prices, which together form a large part of the RPI. However, lower food and energy prices would also play an important role. Since modern comparable records began in 1956, the RPI has dropped into negative territory only once, in the late 1950s and early 1960s, but it only dropped as far as a rate of -0.5pc.
Whereas high inflation tends to encourage borrowing, deflation encourages saving and, as a result, discourages companies from investing and spending today what they could save for tomorrow.
If the UK is facing deflation a la Japan, so is the US. The only reason we are not facing the exact same fates is simple: our trade partners want us to inflate our way out of this mess so we will resume buying their trade goods. So we will be allowed to reinflate our economy. And China, Japan and others will continue to inflate their FOREX reserves. Which will be used to lend money to the US and thus, buy up all our banking, industrial and infrastructures.
The Bank of England faces cutting borrowing costs to beneath two per cent - or even as low as one per cent - within months as it battles to protect Britain from the financial crisis and the worst recession in decades, economists said.
Such a drastic move would bring rates, currently 4.5 per cent, to their lowest level since the Bank was founded in 1694.
The rate cut would be good news for borrowers, who have faced sharp increases in their mortgage rates as embattled banks have raised the cost of borrowing in recent months.
However, it would be a blow for Britain's savers, who have seen their almost £1 trillion worth of deposits eroded by 16-year high inflation.
I keep saying, 0% interest is impossible and even evil. Japan got away with this only because they discovered how to use their FOREX reserves to fund their banking system and they also prevented their own people from getting any cheap loans at all so 100% of this 0% lending went ONLY to their own industrialists who were exporting. And critically, to US and European banks! Who happily slid into this 0% lending trap. Now, our bankers are imitating this 0% interest only we have no FOREX reserves to back this up.
The meeting these clowns are planning to rebuild the global monetary system has to have some historian to stand there and scream, 'YOU CANNOT HAVE ZERO INTEREST RATES! Japan can't do it! You can't do this!'
None of this is going to fix the overinflated real estate markets. Only rising incomes can do this and incomes are going down, like in Japan, not up. This is also all about socialism: it is more important to have good housing and to be careful with national finances than to have wild bidding wars over properties due to super-cheap lending.
Mr Fletcher, the deputy general secretary of Napo, the British probation officers' union, said that speculators who had acted irresponsibly should be given an Asbo and banned from working in financial services.
They should also made to sign "acceptable behaviour contracts" like young offenders, in which they would promise never to repeat their offences, he added.
Mr Fletcher said he could not see any difference between the misery inflicted on the public by young criminals and the financial pain brought on by the credit crisis.
HAHAHA. Arrest them all! But why have this wimpy 'sign a good behavior contract' when the real solution is painfully obvious. Now, we go to the rising industrial/economic giant, China, to see how THEY are handling this problem:
(AP) -- A former Beijing vice mayor in charge of overseeing Olympic construction projects has been given a death sentence for corruption, a court clerk and his lawyer said Sunday.
The Intermediate People's Court in Hengshui, a city outside Beijing, ordered the death sentence Saturday after finding Liu Zhihua guilty of taking bribes, said a court clerk who would only give his surname, Ma.
However, the sentence was "suspended" for two years, Ma said. The reprieve means if Liu shows good behavior, his sentence will be commuted to life imprisonment.
Um, who will succeed here? Britain or China? The fear of a slap on the wrist versus a bullet to the back of the head? If the GOP is at all serious about all those pathetic Joe the Skin Head Plumbers, they would be talking about punishing the bankers the Chinese way, not giving them a 10% cut of all rescue operations.
(Reuters) - China has assured Pakistan of help to get out of its economic crisis, the Pakistani ambassador to Beijing said on Friday, but he gave no details and did not say if China had agreed to urgently needed new loans.
Pakistan, a nuclear-armed U.S. ally, is struggling to come to grips with a financial crisis. Islamabad's rapidly dwindling foreign reserves are at their lowest level since 2002.
It needs $3 billion to $4 billion or it risks defaulting on a $500 million bond due to mature in February, economists say.
China, not the US, is taking over all global rescue operations. China just announced they are going into a joint nuclear power plant building project with Pakistan. Pakistan borders China. And a province of great trouble for China is the one that borders Pakistan. China does NOT want Pakistan in chaos and most certainly does NOT want Muslim radicals running Pakistan. So China, alarmed at the mess there, is rushing in to save Pakistan and will bend all their will towards this project.
Nor do they want Pakistan broken into pieces like we tend to do to any nation we 'help'. Russia also wants Pakistan intact and non-radicalized. So they, too, are courting Pakistan's rulers quite successfully. And this is what a huge FOREX reserve can do: rescue operations as well as currency controls. And the US doesn't understand this at all. We think, we can just print up money, not buy rubles, yuan or yen.